CME Group and Google Cloud Announce New Chicago Area Private Cloud Region and Co-location Facility for CME Group's Markets

Rhea-AI Summary

CME Group and Google Cloud have announced plans to build a new private Google Cloud region and a co-location facility in Aurora, Illinois. This significant milestone aims to support the global trading of CME Group's futures and options markets by offering ultra-low-latency networking and high-performance computing. Clients will have the flexibility to choose between self-managed infrastructure or Google Cloud's specialized infrastructure-as-a-service, both with equal network latency to the exchange. The new platform will enhance operational efficiencies, expand access to cloud services, and bring advanced AI capabilities to market users. The project is set to begin this year with disaster recovery facilities in Dallas, Texas.

Positive

• CME Group and Google Cloud to build a new private cloud region in Aurora, Illinois, enhancing global trading capabilities.
• Clients can choose between self-managed infrastructure or Google Cloud's specialized infrastructure-as-a-service, both offering equal network latency to the exchange.
• The new platform will enable rapid experimentation, testing, and deployment of new strategies, enhancing operational efficiencies.
• The collaboration offers advanced AI and data capabilities, providing enhanced insights and security for financial institutions.

Negative

• Construction of the new private Google Cloud region in Aurora will take time, potentially delaying benefits to CME Group clients.
• Clients will need to adapt to new infrastructure, which may involve transition challenges and costs.

Insights

Financial Analyst

The announcement of CME Group and Google Cloud's new private cloud region and co-location facility in Aurora, Illinois is a noteworthy move in the financial sector. This development signifies a shift towards leveraging cloud technology to enhance trading infrastructure. For investors, this means CME Group is investing in cutting-edge technology to improve operational efficiencies and expand access to global markets.

From a financial perspective, the move could lead to cost savings through improved operational efficiencies and potentially higher revenue as more clients might be attracted to the enhanced services. Utilizing Google Cloud’s AI and data analytics capabilities could provide CME Group with better insights and faster decision-making, which might translate into more competitive pricing and better customer service.

However, there are also potential risks. The migration to a new platform might involve significant upfront costs and potential disruptions if not managed properly. Additionally, reliance on cloud infrastructure introduces cybersecurity risks that need to be effectively mitigated.

Tech Expert

The introduction of a specialized platform within Google Cloud's private cloud region for CME Group marks a significant technological advancement. This platform offers ultra-low-latency networking and high-performance computing, which are important for derivatives trading. Such capabilities can provide CME Group's clients with the agility to experiment with new strategies without disrupting production environments.

One of the key benefits is the integration of Google Cloud's AI capabilities, such as Vertex AI, which enables advanced modeling techniques like time-series forecasting. This can allow traders to generate better insights and optimize their trading strategies. The platform also promises enhanced security features, leveraging Google's AI-powered security mechanisms, which are essential for maintaining trust in digital financial transactions.

Nonetheless, transitioning to cloud-based infrastructure can also pose challenges, particularly around data sovereignty and regulatory compliance. Ensuring that data is handled according to local regulations will be critical in maintaining client trust and avoiding legal repercussions.

Market Research Analyst

This collaboration between CME Group and Google Cloud is expected to change the landscape of capital markets infrastructure. By moving to a cloud-based platform, CME Group aims to provide its clients with more flexible and scalable solutions. This move aligns with the broader trend of digital transformation in financial markets, where agility and data accessibility are becoming key differentiators.

For retail investors, this development highlights CME Group's commitment to innovation and staying ahead of industry trends. The ability for clients to choose between self-managed infrastructure and Google Cloud's infrastructure-as-a-service offering provides flexibility that can cater to diverse needs. This could lead to increased client satisfaction and potentially attract a broader customer base.

However, it's important to monitor how smoothly the transition takes place and whether the anticipated benefits are realized without significant disruptions. Investors should keep an eye on client adoption rates and any feedback related to the new platform's performance to gauge the long-term impact.

• Key milestone paves the way for CME Group to migrate to Google Cloud's industry-first specialized platform for capital markets

CHICAGO and SUNNYVALE, Calif., June 26, 2024 /PRNewswire/ -- Reaching a significant milestone in the companies' transformational partnership, CME Group and Google Cloud today announced plans to build a new private Google Cloud region, and a co-location facility, in Aurora, Illinois.

The private Google Cloud region will host Google Cloud's new, industry-first specialized platform designed to support global trading of CME Group's futures and options markets, and offer derivatives traders cloud-based, ultra-low-latency networking, and high-performance computing.

Locating the platform in the new private Google Cloud region in the Chicago area will allow CME Group's clients to utilize existing connectivity options and access points to other global markets. Additionally, CME Group's clients can choose between self-managed infrastructure in the co-location facility or Google Cloud's specialized infrastructure-as-a-service offering, both with equal network latency to the exchange.

The new specialized platform will enable a number of benefits for CME Group's clients, including expanded flexibility, strengthened operational efficiencies, and increased access to cloud services, and artificial intelligence (AI) capabilities, all of which will deepen the value proposition for market users around the globe. For example, CME Group clients will be enabled to rapidly experiment, test, and deploy new strategies without impacting their production trading environments.

"This is a significant step forward in our partnership with Google Cloud that is revolutionizing our industry," said CME Group Chairman and Chief Executive Officer Terry Duffy. "Located within close proximity to our current data center campus, and with disaster recovery facilities in Dallas, Texas, Google Cloud's new specialized platform will extend the benefits we can provide to our clients through next-generation cloud technology, expanded access and efficiencies, a broader range of customized connectivity options, and faster product development, with minimal disruption to their current operations." 

In addition to the capabilities offered through the new platform, market participants that migrate to the cloud can benefit from Google Cloud's global network and innovative AI and data capabilities. With Google Cloud's data cloud products like BigQuery and AlloyDB, and its AI and machine learning platform, Vertex AI, financial institutions will be able to experiment with new modeling techniques such as time-series forecasting and simplify access to insights with generative AI. All of this is backed by Google Cloud's expanding number of regions, planet-scale network, and AI-powered security.

"Our latest milestone with CME Group builds on our shared goal to accelerate CME's move to the cloud and innovate capital markets infrastructure worldwide," said Thomas Kurian, CEO, Google Cloud. "Through our collaboration, we're harnessing the best of cloud computing, data analytics, and AI, while respecting the existing custom hardware requirements of market participants to bring low latency, deterministic, and scalable trading environments to CME Group customers and the broader financial markets."

Development of the specialized platform is underway, starting with key capabilities available for customer testing in the Dallas Google Cloud region, which will eventually become the disaster recovery facility. Construction of the private Google Cloud region in Aurora is scheduled to begin this year. CME Group expects to provide clients with at least 18 months advance notice before CME Group markets move to the new platform. CME Group cash markets will continue to operate in their current facilities as they do today.

Since announcing their partnership in 2021, CME Group and Google Cloud continue to execute on key initiatives, including recent enhancements to CME Group's cloud-based data platform and migration of critical clearing applications to the cloud. Both firms are focused on delivering significant benefits to all market participants by expanding access, creating real-time, customer-centric data and analytics capabilities, bringing new products and services to market, and increasing efficiencies.

About CME Group

As the world's leading derivatives marketplace, CME Group (www.cmegroup.com) enables clients to trade futures, options, cash and OTC markets, optimize portfolios, and analyze data – empowering market participants worldwide to efficiently manage risk and capture opportunities. CME Group exchanges offer the widest range of global benchmark products across all major asset classes based on interest rates, equity indexes, foreign exchange, energy, agricultural products and metals.  The company offers futures and options on futures trading through the CME Globex platform, fixed income trading via BrokerTec and foreign exchange trading on the EBS platform.  In addition, it operates one of the world's leading central counterparty clearing providers, CME Clearing. 

CME Group, the Globe logo, CME, Chicago Mercantile Exchange, Globex, and E-mini are trademarks of Chicago Mercantile Exchange Inc.  CBOT and Chicago Board of Trade are trademarks of Board of Trade of the City of Chicago, Inc.  NYMEX, New York Mercantile Exchange and ClearPort are trademarks of New York Mercantile Exchange, Inc.  COMEX is a trademark of Commodity Exchange, Inc. BrokerTec is a trademark of BrokerTec Americas LLC and EBS is a trademark of EBS Group LTD. The S&P 500 Index is a product of S&P Dow Jones Indices LLC ("S&P DJI"). "S&P®", "S&P 500®", "SPY®", "SPX®", US 500 and The 500 are trademarks of Standard & Poor's Financial Services LLC; Dow Jones®, DJIA® and Dow Jones Industrial Average are service and/or trademarks of Dow Jones Trademark Holdings LLC. These trademarks have been licensed for use by Chicago Mercantile Exchange Inc. Futures contracts based on the S&P 500 Index are not sponsored, endorsed, marketed, or promoted by S&P DJI, and S&P DJI makes no representation regarding the advisability of investing in such products. All other trademarks are the property of their respective owners.

About Google Cloud

Google Cloud is the new way to the cloud, providing AI, infrastructure, developer, data, security, and collaboration tools built for today and tomorrow. Google Cloud offers a powerful, fully integrated and optimized AI stack with its own planet-scale infrastructure, custom-built chips, generative AI models and development platform, as well as AI-powered applications, to help organizations transform. Customers in more than 200 countries and territories turn to Google Cloud as their trusted technology partner.

CME-G

 

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SOURCE CME Group; Google Cloud

FAQ

What is the new project announced by CME Group and Google Cloud?

CME Group and Google Cloud announced plans to build a new private Google Cloud region and co-location facility in Aurora, Illinois, to support global trading of futures and options markets.

When will the construction of the new Google Cloud region in Aurora begin?

Construction of the new private Google Cloud region in Aurora is scheduled to begin this year.

How will the new Google Cloud region benefit CME Group clients?

The new Google Cloud region will provide ultra-low-latency networking, high-performance computing, enhanced operational efficiencies, and access to advanced AI capabilities for CME Group clients.

What infrastructure options will be available for CME Group clients in the new Google Cloud region?

CME Group clients can choose between self-managed infrastructure in the co-location facility or Google Cloud's specialized infrastructure-as-a-service, both with equal network latency to the exchange.

What additional benefits will the new platform offer to market participants?

The new platform will enable expanded flexibility, enhanced operational efficiencies, increased access to cloud services, and advanced AI capabilities, allowing for rapid experimentation and deployment of new strategies.

Where will the disaster recovery facilities for the new platform be located?

The disaster recovery facilities for the new platform will be located in Dallas, Texas.

What impacts will the new Google Cloud region have on CME Group's existing facilities?

CME Group cash markets will continue to operate in their current facilities as they do today, with the new platform providing additional capabilities and efficiencies.