Google has signed a significant six-year cloud computing agreement with Meta Platforms, valued at over $10 billion, according to a source familiar with the matter. This deal marks the search giant’s second major cloud partnership recently, following a similar agreement with AI research lab OpenAI. Under the terms of the deal, Meta will utilize Google Cloud’s extensive infrastructure, including servers, storage, and networking services to support its operations.
This massive investment aligns with Meta CEO Mark Zuckerberg’s recent comments in July, where he stated the company planned to spend hundreds of billions of dollars to construct several massive AI data centers. To help fund this immense infrastructure push, Meta has been seeking outside partners and even raised the lower end of its annual capital expenditure forecast by $2 billion last month, bringing it to a range of $66 billion to $72 billion.
The agreement between Google and Meta, two tech titans that compete in several areas, highlights the enormous and costly computational demands of the ongoing AI race. It follows a report in June that OpenAI, which is backed by Microsoft, would also use Google Cloud to meet its growing capacity needs, demonstrating a trend of pragmatic collaboration amidst fierce competition.
This flurry of high-value deals is already reflecting positively on Google’s financial performance. In July, Google’s parent company, Alphabet, reported that its cloud-computing unit delivered a nearly 32% jump in second-quarter revenue, a surge that significantly surpassed market expectations.
