OpenAI Strikes Surprising Cloud Deal with Google Amid Fierce AI Competition

OpenAI signs surprise deal with Google Cloud despite fierce AI rivalry

OpenAI has struck a deal to use Google's cloud computing infrastructure for AI despite the two companies' fierce competition in the space, reports Reuters. The agreement, finalized in May after months of negotiations, marks a shift in OpenAI's strategy to diversify its computing resources beyond Microsoft Azure, which had been its exclusive cloud provider until January. Microsoft's long-standing partnership with OpenAI dates back to 2019, with significant expansions of investment from the computer giant in 2021 and 2023. In October, The Information reported that the ChatGPT maker had begun to seek data center deals elsewhere, citing the need for more AI data center servers faster than Microsoft could supply them. Under the new deal, Google Cloud will provide additional computing capacity to help OpenAI train and run its AI models. For OpenAI, the partnership addresses growing demands for computing power as the company's annual revenue reached $10 billion as of June, according to sources familiar with the matter who spoke to Reuters. The partnership, which took shape despite an intense rivalry in the AI space between Google and OpenAI, shows how competitors sometimes form alliances when they are mutually beneficial. The company's DeepMind AI unit competes directly with OpenAI in developing AI models and consumer applications. OpenAI's ChatGPT arguably poses the most serious threat to Google's search business in years, but Google's CEO recently suggested the AI race may not be winner-take-all.

Why OpenAI and Google's surprising new alliance makes a lot of AI sense

The partnership gives the ChatGPT-maker access to Google's cloud services for training new AI models - and more distance from Microsoft. In geopolitics, nations with conflicting societal norms or ideological views must occasionally form alliances in the interest of protecting their mutual interests; practicality must take precedence over past rivalries. Today, a similar dynamic is starting to play out in the AI arms race. OpenAI, the AI start-up that skyrocketed to global fame following the viral success of its ChatGPT chatbot, has teamed up with Google, its longtime competitor, according to a Reuters report. The realpolitik-style partnership -- reportedly finalized last month -- will give OpenAI access to Google's cloud computing services to support its efforts to train increasingly powerful AI models. Also: Apple's de-chatbot-ification of AI is nearly complete The launch of ChatGPT in 2022 sparked a race among leading tech firms and a profusion of newer startups to invest in generative AI, which is widely regarded as the most important technology since social media or the smartphone. But the technology is notoriously expensive to build, typically requiring vast amounts of data for training and costly graphics processing units, or GPUs. The sudden demand for these semiconductors has led to massive wealth for Nvidia and other chipmakers and to the construction of huge (and energy-hungry) data centers. It's also become a key point of leverage in geopolitics, with the US restricting the quantity of GPUs that can be exported to China in an effort to restrict that nation's own AI efforts. OpenAI, which was founded as a nonprofit in 2015, later switched to a "capped profit" structure, allowing it to raise money from investors to cover the expenses of building AI models. Microsoft became its primary financial backer, investing around $13 billion since 2019. (Disclosure: Ziff Davis, ZDNET's parent company, filed an April 2025 lawsuit against OpenAI, alleging it infringed Ziff Davis copyrights in training and operating its AI systems.) Also: This new AI video editor is an all-in-one production service for filmmakers - how to try it Microsoft's Azure cloud service was OpenAI's sole data center provider until January, when the latter company signed deals with Oracle and SoftBank to construct new data center facilities. The new deal with Google marks OpenAI's latest effort to distance itself from Microsoft. For Google, the partnership could help fuel an expansion of its cloud business at a time when ChatGPT is threatening its long-running monopoly on online search. The company has also been facing pressure from investors to show returns on its huge AI-related expenditures, which, according to Reuters, are expected to reach around $75 billion in 2025.

Exclusive: OpenAI taps Google in unprecedented cloud deal despite AI rivalry, sources say

SAN FRANCISCO, June 10 (Reuters) - OpenAI plans to add Alphabet's (GOOGL.O), opens new tab Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft (MSFT.O), opens new tab, including its high-profile Stargate data center project. It is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, sources said, who requested anonymity to discuss private matters. The move also comes as OpenAI's ChatGPT poses the biggest threat to Google's dominant search business in years, with Google executives recently saying that the AI race may not be winner-take-all. OpenAI, Google and Microsoft declined to comment. Since ChatGPT burst onto the scene in late 2022, OpenAI has dealt with increasing demand for computing capacity - known in the industry as compute - for training large language models, as well as for running inference, which involves processing information so people can use these models. OpenAI said on Monday that its annualized revenue run rate surged to $10 billion as of June, positioning the company to hit its full-year target amid booming adoption of AI. Earlier this year, OpenAI partnered with SoftBank (9984.T), opens new tab and Oracle (ORCL.N), opens new tab on the $500 billion Stargate infrastructure program, and signed deals worth billions with CoreWeave (CRWV.O), opens new tab for more compute. It is on track this year to finalize the design of its first in-house chip that could reduce its dependency on external hardware providers, Reuters reported in February. The partnership with Google is the latest of several maneuvers made by OpenAI to reduce its dependency on Microsoft (MSFT.O), opens new tab, whose Azure cloud service had served as the ChatGPT maker's exclusive data center infrastructure provider until January. Google and OpenAI discussed an arrangement for months but were previously blocked from signing a deal due to OpenAI's lock-in with Microsoft, a source told Reuters. Microsoft and OpenAI are also in negotiations to revise the terms of their multibillion-dollar investment, including the future equity stake Microsoft will hold in OpenAI. For Google, the deal comes as the tech giant is expanding of its in-house chip known as tensor processing units, or TPUs, which were historically reserved for internal use. That helped Google win customers including Big Tech player Apple (AAPL.O), opens new tab as well as startups like Anthropic and Safe Superintelligence, two OpenAI competitors launched by former OpenAI leaders. Google's addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology from hardware to software to accelerate the growth of its cloud business. Google Cloud, whose $43 billion of sales comprised 12% of Alphabet's 2024 revenue, has positioned itself as a neutral arbiter of computing resources in an effort to outflank Amazon (AMZN.O), opens new tab and Microsoft as the cloud provider of choice for a rising legion of AI startups whose heavy infrastructure demands generate costly bills. Alphabet faces market pressure to demonstrate financial returns on its AI-related capital expenditures, which are expected to hit $75 billion this year, while maintaining its bottom line against the threat of competing AI offerings, as well as antitrust enforcement. Google's DeepMind AI unit also competes directly with OpenAI and Anthropic in a race to develop the best models and integrate those advances into consumer applications. Selling computing power reduces Google's own supply of chips while bolstering capacity-constrained rivals. The OpenAI deal will further complicate how Alphabet CEO Sundar Pichai allocates the capacity between the competing interests of Google's enterprise and consumer business segments. Google already lacked sufficient capacity to meet its cloud customers' demands as of the last quarter, opens new tab, Chief Financial Officer Anat Ashkenazi told analysts in April. Although ChatGPT holds a large lead over Google's competing chatbot in terms of monthly users and analysts have predicted it could reduce Google's dominant search market share, Pichai has brushed aside concerns that OpenAI will usurp Google's business dominance. Reporting by Kenrick Cai in San Francisco and Krystal Hu in New York; Editing by Kenneth Li and Matthew Lewis Our Standards: The Thomson Reuters Trust Principles., opens new tab Suggested Topics:Disrupted Kenrick Cai Thomson Reuters Kenrick Cai is a correspondent for Reuters based in San Francisco. He covers Google, its parent company Alphabet and artificial intelligence. Cai joined Reuters in 2024. He previously worked at Forbes magazine, where he was a staff writer covering venture capital and startups. He received a Best in Business award from the Society for Advancing Business Editing and Writing in 2023. He is a graduate of Duke University. Krystal Hu Thomson Reuters Krystal reports on venture capital and startups for Reuters. She covers Silicon Valley and beyond through the lens of money and characters, with a focus on growth-stage startups, tech investments and AI. She has previously covered M&A for Reuters, breaking stories on Trump's SPAC and Elon Musk's Twitter financing. Previously, she reported on Amazon for Yahoo Finance, and her investigation of the company's retail practice was cited by lawmakers in Congress. Krystal started a career in journalism by writing about tech and politics in China. She has a master's degree from New York University, and enjoys a scoop of Matcha ice cream as much as getting a scoop at work.

OpenAI will reportedly start using Google's cloud servers

OpenAI has inked a deal with Google to begin using the latter's cloud service to meet its growing needs for increased computing capacity, . This is something of a surprise, given that Google and OpenAI are rivals in the AI space. The terms of the deal remain unknown, but reporting indicates it has been in the negotiation phase for the past several months. This marks OpenAI's latest move to diversify its compute sources away from Microsoft Azure. Microsoft had been OpenAI's exclusive , after OpenAI CEO Sam Altman for the delay of several products. The company made a deal in March with CoreWeave . That deal was worth nearly $12 billion. Microsoft Azure may no longer be the exclusive cloud provider for OpenAI, but it's not as if the two companies have parted ways. OpenAI still relies heavily on Azure and the corporations are currently in negotiations to revise the terms of their partnership, which will likely . However, this is certainly a win for Google Cloud. ChatGPT poses the biggest threat to , and this deal could indicate a softening between the two companies. In any event, it'll certainly bring a whole lot of money into Google Cloud's coffers. The platform made $43 billion last year and accounted for 12 percent of parent company Alphabet's overall revenue. The addition of OpenAI to its customer portfolio will likely extend those numbers dramatically. There is an elephant in the room. Google has famously for its cloud services, and this was before bringing on OpenAI. Simply put, . Will OpenAI get priority access over pre-existing customers? Engadget has reached out to Google and will update this story if we hear back. To that end, OpenAI is certainly thriving. The company recently announced that the current adoption rate of its software will lead to as of June. It told investors that it has a target revenue goal of around $12 billion for the year, which it should easily meet with new subscribers.

ChatGPT could soon run on Google's servers instead of Microsoft's

Summary Google and OpenAI will reportedly collaborate on AI. The deal allows Google to provide OpenAI with cloud solutions for additional computing capacity. This deal with Google will help OpenAI rely less on Microsoft. Google and OpenAI compete with each other in the artificial intelligence domain, with both companies offering some of the best on Android phones. However, it now looks like both companies are putting aside the competition and have struck a deal to collaborate in the field of AI. Related ChatGPT's search engine just opened up for anyone to use No account required Posts According to sources close to Reuters, OpenAI sought help from Google to use its servers to run ChatGPT. Sources further revealed that the deal was finalized in May this year. None of the companies commented on their alleged partnership, but this will be significant for both. It's a win for Google's cloud infrastructure, as the OpenAI partnership boosts its reputation, whereas for OpenAI, the deal means less reliance on Microsoft. What does Google bring to the table for OpenAI? The report from Reuters claims that the deal enables Google to supply OpenAI with cloud solutions that will provide 'additional computing capacity' for training and running AI models that ChatGPT relies on. This was in the making for several months, but it couldn't materialize because of OpenAI's partnership with Microsoft, which didn't allow the former to run ChatGPT on data center infrastructure other than Microsoft Azure. This lasted until January this year, so OpenAI had to explore other options. The report doesn't clarify whether ChatGPT will run exclusively on Google's cloud solution, but regardless of the extent, this allows Google to rely less on Microsoft. Whatever the case may be, development comes at a time when ChatGPT faces a massive global outage across the globe. While service outages can happen for several reasons, more diversification in terms of partners can reduce the chances of failures. However, it isn't clear whether OpenAI will fully switch to Google's cloud solution or adopt a hybrid strategy, with Azure being the other compute source. Hopefully, we'll get more clarity on the Google-OpenAI deal when both companies officially announce their partnership. This is "behind-the-scenes" stuff, but it does impact users' experience in the sense that the AI solution can become more reliable and have less downtime. That said, these under-the-hood changes won't mean much if you don't know how to use ChatGPT to increase your productivity.

Report: Google and OpenAI reach cloud deal despite ChatGPT vs Gemini rivalry

OpenAI is reportedly tapping Google's cloud services to power ChatGPT and other services as it seeks to diversify from Microsoft. As reported by Reuters, OpenAI will be leveraging Google Cloud in its growing need for compute capacity. The deal comes as a shock, really, as Google's Gemini is one of OpenAI's biggest competitors, while OpenAI has become a major competitor to Google Search. This deal has reportedly been under discussion for some time, but was finalized last month. Apparently, the deal was "previously blocked from signing a deal due to OpenAI's lock-in with Microsoft." The report says: OpenAI plans to add Alphabet's Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft, including its high-profile Stargate data center project. It's unclear exactly what the scope of what Google's cloud services will be powering for OpenAI, but it's a major deal for both companies.

OpenAI just signed a surprise deal with Google -- here's why it matters

In a surprising twist in the AI arms race, OpenAI has signed a major deal with Google Cloud to access its infrastructure -- even as ChatGPT competes directly with Google's own Gemini AI assistant. First reported exclusively by Reuters, the move signals a shift in strategy as OpenAI looks to scale its models faster and more reliably in the face of growing global demand. Since 2019, OpenAI has relied almost exclusively on Microsoft Azure as its cloud provider, thanks to Microsoft's multibillion-dollar investment and deep integration across tools like Copilot and Bing Chat. But that exclusivity appears to be softening. As reported by Reuters, OpenAI finalized a deal last month to begin tapping Google Cloud's powerful infrastructure, including its custom TPU chips. The reason is simple: capacity. As AI model training grows more resource-intensive, OpenAI is adopting a multi-cloud strategy to avoid overreliance on a single provider, and to keep pace with user demand. The deal with Google suggests OpenAI is seeking both scale and flexibility as it pushes into next-gen model development and possibly even its own chip design in the future. For Google, this is a huge credibility boost. OpenAI joins the ranks of high-profile clients like Anthropic and Apple who also rely on Google's data centers. It further positions Google Cloud as a serious contender in the battle for AI infrastructure dominance, thanks to its high-performance TPUs and deep engineering resources. Yes, OpenAI and Google are AI rivals, but in the cloud world, competition often takes a backseat to raw compute needs. "This is less about rivalry and more about keeping hardware busy," one source told Reuters. In short, cloud vendors will work with just about anyone if it keeps their data centers profitable. Going forward, this signals a turning point. OpenAI's deal with Google highlights a growing trend: cloud flexibility is now a competitive advantage. I think we can expect more AI companies to diversify their infrastructure, choosing performance and scalability over long-term exclusivity. In the AI era, even rivals need to share resources to survive.

OpenAI set to add Google Cloud services as it looks to meet computing capacity needs

Despite having a long history with Microsoft, OpenAI is believed to have signed a deal with Google Cloud to help it meet rising demands for cloud computing services. Reuters reports the deal was finalized in May 2025 after months of negotiating, citing an unnamed source familiar with the matter. The finer details of its Google Cloud deal are unknown, but the move reflects OpenAI's effort to reduce its reliance on a single vendor - in this case, Microsoft - having recently announced its own $500 billion Stargate Project earlier in 2025. Although Microsoft has fuelled much of OpenAI's growth with cloud infrastructure throughout a period of rapid expansion, the company stopped being its sole partner in March 2025, when OpenAI brought CoreWeave on board in a deal worth around $12 billion. Now, Google Cloud will also provide resources to help OpenAI train and run its AI models. During its first quarter of 2025, Google Cloud generated $12.3 billion in revenue, or nearly 14% of Google's total revenue. A deal with OpenAI could significantly increase the cloud division's revenue. However, ChatGPT's success has allowed OpenAI to explore in-house opportunities. Besides the Stargate Project, in collaboration with SoftBank and Oracle, OpenAI is also working on its own AI chip, which could spell disaster for Nvidia, which has once again taken prime position as the world's most valuable company, with a market cap of $3.510 trillion. Sceptics are also uncertain about how Google Cloud's deal with OpenAI could impact its existing operations and customers, with the cloud hyperscaler already struggling to meet demand on occasions. Google shares rose 2.1% after the news, with Microsoft shares dipping 0.6%, pulling it into second position with a market cap of $3.500 trillion.

OpenAI Taps into Google's Cloud Service Despite Being Arch Rivals | AIM

The deal represents a win for Google's cloud division, which will provide computational capacity to support OpenAI's current systems. OpenAI intends to incorporate Alphabet's Google cloud service to fulfil its increasing demand for computing resources, according to sources who spoke to Reuters. This would signify an unexpected partnership between two major rivals in the field of artificial intelligence. One of the sources said that the agreement, which had been under negotiation for several months, was completed in May. It highlights how the enormous computing requirements for training and implementing AI models are altering the competitive landscape in AI. It marks OpenAI's effort to broaden its computing resources beyond its primary partner, Microsoft, which includes its notable Stargate data centre initiative. This deal represents a win for Google's cloud division, which will provide additional computational capacity to support OpenAI's current systems for training and operating its AI models, according to sources who preferred to remain anonymous due to the sensitive nature of the information. This development comes as OpenAI's ChatGPT presents a significant challenge to Google's long-standing search monopoly. Google executives recently stated that the AI competition may not result in a single dominant player. According to Reuters, analysts from Scotiabank described the development as "somewhat surprising" in a note on Tuesday. They emphasised the potential for growth in Google's Cloud division while expressing concern about competition from ChatGPT. "The deal... underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands. Ultimately, we view this as a big win for Google's cloud unit, but ... there are continued worries that ChatGPT is becoming an incrementally larger threat to Google's search dominance," the analysts wrote. Google is a leading contender in the AI race, and it's evident how much AI tools are being integrated into everything it develops. AIM previously highlighted that Gemini 2.5 is key to new features and developer tools. Google is enhancing AI integration with real-time 3D video calls via Google Beam, smarter coding assistants, and AI-driven search, all of which prioritise speed and efficiency for developers.

OpenAI Enlists Google Cloud for Computing Capacity in Partnership of AI Rivals, Report Says

Google selling capacity to OpenAI potentially reduces its own capacity even as overall cloud demand has outpaced the company's supply, Google's CFO said in April. OpenAI has reportedly turned to one of its biggest competitors in the AI arms race to support the training of its ChatGPT models. The ChatGPT developer has finalized a deal to utilize Alphabet's (GOOGL) Google cloud services to meet its increasing need for computing capacity, Reuters reported. The agreement would effectively provide OpenAI with more chips for the development of ChatGPT. The agreement comes despite fierce competition between ChatGPT and Google's Gemini large language model. Last month, Google introduced an "AI Mode" search feature that lets users ask questions in conversation with Gemini, a move that addresses the popularity of LLMs in how people get their information. Google selling capacity to OpenAI potentially reduces its own even as cloud demand has outpaced the company's supply, Alphabet CFO Anat Ashkenazi said in April. OpenAI previously relied exclusively on its partnership with Microsoft (MSFT) for its computing capacity, but the companies in January moved to a mode where Microsoft instead has right of first refusal on new OpenAI compute. Microsoft declined to comment on the Reuters report. OpenAI and Google did not immediately respond to Investopedia requests for comment. Shares of Alphabet gained 2% in recent trading. The stock has fallen about 5% in 2025.

OpenAI Might Be Eyeing Google Cloud Partnership for Compute Power

OpenAI's deal comes amid strong competition between the two companies OpenAI is reportedly planning to use Google Cloud's services to fuel its computational requirements. As per the report, the San Francisco-based artificial intelligence (AI) firm and the Mountain View-based tech giant have been discussing this partnership for several months. With this move, OpenAI could shift some of the server requirements for ChatGPT and Sora to Google. Currently, the financial details of this deal are not known, although it is likely that the Gemini-maker is getting its fair share of remuneration. According to a Reuters report, the ChatGPT maker has struck a deal to use Google Cloud's servers to power ChatGPT's computational needs. Citing three different unnamed sources, the publication claimed that OpenAI's requirement for additional cloud servers has increased in recent times, which has led to them seeking this partnership. Not a lot of details about the deal are known, although the two entities reportedly discussed the partnership for several months before finalising it in May. No financial terms of the deal were revealed. This partnership between OpenAI and Google is intriguing, given that both of them are currently competing for the same share of the AI market. Both companies have been aggressively releasing large language models, expanding the use case of their chatbots, and finding newer ways to reach users (while Google is integrating Gemini into all of its products, OpenAI has been exploring partnerships with OEMs). Interestingly, less than a week after Google released the upgraded Gemini 2.5 Pro model, OpenAI introduced its o3-pro model. Similarly, after the former announced reduced application programming interface (API) costs for its latest AI models compared to the latter, the ChatGPT maker announced an 80 percent price cut on its o3 model. Despite the competition, however, OpenAI cannot ignore its dire need to increase compute capacity. After the release of the image generation feature powered by GPT-4o, Altman had posted that the company's GPUs were "melting." Separately, ChatGPT servers were down for several hours on Tuesday, resulting in a widespread outage.

Google ChatGpt creator OpenAI deal inked? What we know so far

Google's addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology from hardware to software to accelerate the growth of its cloud business.OpenAI plans to add Alphabet's Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft, including its high-profile Stargate d ata center project, as per a report. It is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, sources said, who requested anonymity to discuss private matters. The move also comes as OpenAI's ChatGPT poses the biggest threat to Google's dominant search business in years, with Google executives recently saying that the AI race may not be winner-take-all, Reuters reported. OpenAI, Google and Microsoft declined to comment. Since ChatGPT burst onto the scene in late 2022, OpenAI has dealt with increasing demand for computing capacity - known in the industry as compute - for training large language models, as well as for running inference, which involves processing information so people can use these models. OpenAI said on Monday that its annualized revenue run rate surged to $10 billion as of June, positioning the company to hit its full-year target amid booming adoption of AI. Earlier this year, OpenAI partnered with SoftBank and Oracle on the $500 billion Stargate infrastructure program, and signed deals worth billions with CoreWeave for more compute. It is on track this year to finalize the design of its first in-house chip that could reduce its dependency on external hardware providers, Reuters reported in February. The partnership with Google is the latest of several maneuvers made by OpenAI to reduce its dependency on Microsoft, whose Azure cloud service had served as the ChatGPT maker's exclusive data center infrastructure provider until January. Google and OpenAI discussed an arrangement for months but were previously blocked from signing a deal due to OpenAI's lock-in with Microsoft, a source told Reuters. Microsoft and OpenAI are also in negotiations to revise the terms of their multibillion-dollar investment, including the future equity stake Microsoft will hold in OpenAI. For Google, the deal comes as the tech giant is expanding external availability of its in-house chip known as tensor processing units, or TPUs, which were historically reserved for internal use. That helped Google win customers including Big Tech player Apple as well as startups like Anthropic and Safe Superintelligence, two OpenAI competitors launched by former OpenAI leaders. Google's addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology from hardware to software to accelerate the growth of its cloud business. Q1. What do we know about Google's DeepMind AI? A1. Google's DeepMind AI unit also competes directly with OpenAI and Anthropic in a race to develop the best models and integrate those advances into consumer applications. Q2. What do we know about Google Cloud? A2. Google Cloud, whose $43 billion of sales comprised 12 per cent of Alphabet's 2024 revenue, has positioned itself as a neutral arbiter of computing resources in an effort to outflank Amazon and Microsoft as the cloud provider of choice for a rising legion of AI startups whose heavy infrastructure demands generate costly bills.

OpenAI taps Google in unprecedented cloud deal despite AI rivalry, sources say

The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft, including its high-profile Stargate data center project.OpenAI plans to add Alphabet's Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. The deal, which has been under discussion for a few months, was finalised in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft, including its high-profile Stargate data center project. It is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, sources said, who requested anonymity to discuss private matters. The move also comes as OpenAI's ChatGPT poses the biggest threat to Google's dominant search business in years, with Google executives recently saying that the AI race may not be winner-take-all. OpenAI, Google and Microsoft declined to comment. Since ChatGPT burst onto the scene in late 2022, OpenAI has dealt with increasing demand for computing capacity - known in the industry as compute - for training large language models, as well as for running inference, which involves processing information so people can use these models. OpenAI said on Monday that its annualised revenue run rate surged to $10 billion as of June, positioning the company to hit its full-year target amid booming adoption of AI. Earlier this year, OpenAI partnered with SoftBank and Oracle on the $500 billion Stargate infrastructure program, and signed deals worth billions with CoreWeave for more compute. It is on track this year to finalise the design of its first in-house chip that could reduce its dependency on external hardware providers, Reuters reported in February. The partnership with Google is the latest of several maneuvers made by OpenAI to reduce its dependency on Microsoft, whose Azure cloud service had served as the ChatGPT maker's exclusive data center infrastructure provider until January. Google and OpenAI discussed an arrangement for months but were previously blocked from signing a deal due to OpenAI's lock-in with Microsoft, a source told Reuters. Microsoft and OpenAI are also in negotiations to revise the terms of their multibillion-dollar investment, including the future equity stake Microsoft will hold in OpenAI. For Google, the deal comes as the tech giant is expanding external availability of its in-house chip known as tensor processing units, or TPUs, which were historically reserved for internal use. That helped Google win customers including Big Tech player Apple as well as startups like Anthropic and Safe Superintelligence, two OpenAI competitors launched by former OpenAI leaders. Google's addition of OpenAI to its customer list shows how the tech giant has capitalised on its in-house AI technology from hardware to software to accelerate the growth of its cloud business. Google Cloud, whose $43 billion of sales comprised 12% of Alphabet's 2024 revenue, has positioned itself as a neutral arbiter of computing resources in an effort to outflank Amazon and Microsoft as the cloud provider of choice for a rising legion of AI startups whose heavy infrastructure demands generate costly bills. Alphabet faces market pressure to demonstrate financial returns on its AI-related capital expenditures, which are expected to hit $75 billion this year, while maintaining its bottom line against the threat of competing AI offerings, as well as antitrust enforcement. Google's DeepMind AI unit also competes directly with OpenAI and Anthropic in a race to develop the best models and integrate those advances into consumer applications. Selling computing power reduces Google's own supply of chips while bolstering capacity-constrained rivals. The OpenAI deal will further complicate how Alphabet CEO Sundar Pichai allocates the capacity between the competing interests of Google's enterprise and consumer business segments. Google already lacked sufficient capacity to meet its cloud customers' demands as of the last quarter, Chief Financial Officer Anat Ashkenazi told analysts in April. Although ChatGPT holds a large lead over Google's competing chatbot in terms of monthly users and analysts have predicted it could reduce Google's dominant search market share, Pichai has brushed aside concerns that OpenAI will usurp Google's business dominance.

Google Cloud's OpenAI Deal 'A Win For TPU Chips,' Microsoft Partner Says

'Make no mistake, this is also a win for Google Cloud against Microsoft Azure," says one Microsoft partner top executive. '[OpenAI] has continued, all year long, to loosen its dependency on Microsoft.' The AI wars are continuing as Microsoft-backed OpenAI has signed a deal with Google Cloud to provide the ChatGPT owner with more cloud computing infrastructure and services. "This is a win for [Google's] TPU chips," said one top executive from a solution provider that partners with Microsoft on a global basis who declined to be identified. "And make no mistake, this is also a win for Google Cloud against Microsoft Azure. ... [OpenAI] has continued, all year long, to loosen its dependency on Microsoft." Until January 2025, OpenAI was using Microsoft as its exclusive data center provider. However, OpenAI CEO Sam Altman this year has said a lack of compute capacity had delayed several products. For example, Altman said this week that the release of OpenAI's first open AI model in years would be delayed. "We are going to take a little more time with our open-weight model, i.e., expect it later this summer but not June," he wrote this week on social media platform X. [Related: Broadcom Dumps Registered VMware Resellers; 'Raising The Bar Across The Program,' Says Channel Chief] "OpenAI needs more capacity for their gigantic AI demands. For them to go with an actual real competitor like Google, it just shows how much they need their custom chips for AI -- things like ChapGPT need more capacity and power to innovate and reiterate on," said the executive. "Not even Microsoft can handle that demand alone it seems." In March, OpenAI signed a deal worth billions of dollars with fast-growing data center provider CoreWeave to provide more cloud computing capabilities. In addition, OpenAI this year signed partnerships with Oracle and SoftBank on its $500 billion Stargate infrastructure project. Google has invested millions in creating its own custom AI chips, including its in-house tensor processing units (TPUs), which has helped Google win over other AI startups such as Anthropic. Google Cloud TPUs are custom-designed AI accelerators optimized for training and inference of AI models. They're ideal for use cases such as agents, code generation, media content generation, synthetic speech, recommendation engines and personalization models. Google has its own DeepMind AI lab that competes directly against OpenAI around developing large language models (LLMs) for AI customers. "Hats off to Google. They made the right R&D moves to win over a customer with lots of money to spend," said the executive. In April, Google unveiled its seventh-generation TPU, dubbed Ironwood, specifically designed for AI inference. OpenAI's new deal with Google Cloud has reportedly been in discussions for months, according to a Reuters report, and was closed in May. Microsoft and OpenAI are also negotiating to revise the terms of their multibillion-dollar investment, including how much stake Microsoft will hold in OpenAI in the future, according to Reuters. "[OpenAI] will be spending a ton of money on Google. They have $10 billion in sales. There's money to be made here by Google," the solution provider executive said. "We're a big Azure shop, but I can see Google making some headwinds with its chips and cloud business overall because of the money they're going to make on OpenAI. ... But we're still big believers that Microsoft will be the leader in the AI era."

Report: OpenAI Taps Google's Cloud Service for Extra Computing Capacity | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The companies had been discussing a deal for months but had been unable to sign it until an agreement that made Microsoft OpenAI's exclusive data center infrastructure provider ended in January, Reuters reported Tuesday (June 10), citing unnamed sources. OpenAI and Google finalized their deal in May, according to the report. Neither OpenAI nor Google immediately replied to PYMNTS' request for comment. The deal marks a collaboration between competitors, as OpenAI and Google are both prominent in AI and in search, where OpenAI's ChatGPT may challenge Google's search business, according to the report. It also signals a diversification of compute sources by OpenAI, which partnered earlier this year with SoftBank and Oracle on the Stargate infrastructure program and with CoreWeave for more compute, the report said. Microsoft announced in a Jan. 21 blog post that it would no longer be OpenAI's exclusive cloud provider for its AI models. Instead, it will have the right of first refusal to host OpenAI's workloads in Azure. The company had become OpenAI's exclusive cloud provider in a 2019 agreement after investing $1 billion in AI startup. Since then, Microsoft reportedly has invested a total of nearly $14 billion in the AI startup. For Google, the reported deal with OpenAI is the latest in a series of deals that have been aided by the company's expanding availability of its in-house chips known as tensor processing units. In other recent deals, Google's cloud unit has also gained the business of Apple, Anthropic and Safe Superintelligence, per the Reuters report. AI data centers are needed because traditional data centers and power grids are struggling to accommodate the intense computational power, data storage and energy required by AI, PYMNTS reported in January. "AI data centers are fundamentally different because they require specialized hardware and infrastructure to handle the massive parallel processing needed for AI workloads," Deborah Perry Piscione, co-founder and CEO of Work3 Institute, an AI and Web3 advisory firm, told PYMNTS at the time.

ChatGPT owner OpenAI strikes unprecedented cloud deal with rival...

OpenAI plans to add Alphabet's Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector. The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft, including its high-profile Stargate data center project. It is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, sources said, who requested anonymity to discuss private matters. The move also comes as OpenAI's ChatGPT poses the biggest threat to Google's dominant search business in years, with Google executives recently saying that the AI race may not be winner-take-all. OpenAI, Google and Microsoft declined to comment. Since ChatGPT burst onto the scene in late 2022, OpenAI has dealt with increasing demand for computing capacity -- known in the industry as compute -- for training large language models, as well as for running inference, which involves processing information so people can use these models. OpenAI said on Monday that its annualized revenue run rate surged to $10 billion as of June, positioning the company to hit its full-year target amid booming adoption of AI. Earlier this year, OpenAI partnered with SoftBank and Oracle on the $500 billion Stargate infrastructure program, and signed deals worth billions with CoreWeave for more compute. It is on track this year to finalize the design of its first in-house chip that could reduce its dependency on external hardware providers, Reuters reported in February. The partnership with Google is the latest of several maneuvers made by OpenAI to reduce its dependency on Microsoft, whose Azure cloud service had served as the ChatGPT maker's exclusive data center infrastructure provider until January. Google and OpenAI discussed an arrangement for months but were previously blocked from signing a deal due to OpenAI's lock-in with Microsoft, a source told Reuters. Microsoft and OpenAI are also in negotiations to revise the terms of their multibillion-dollar investment, including the future equity stake Microsoft will hold in OpenAI. For Google, the deal comes as the tech giant is expanding external availability of its in-house chip known as tensor processing units, or TPUs, which were historically reserved for internal use. That helped Google win customers including Big Tech player Apple as well as startups like Anthropic and Safe Superintelligence, two OpenAI competitors launched by former OpenAI leaders. Google's addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology from hardware to software to accelerate the growth of its cloud business. Google Cloud, whose $43 billion of sales comprised 12% of Alphabet's 2024 revenue, has positioned itself as a neutral arbiter of computing resources in an effort to outflank Amazon and Microsoft as the cloud provider of choice for a rising legion of AI startups whose heavy infrastructure demands generate costly bills. Alphabet faces market pressure to demonstrate financial returns on its AI-related capital expenditures, which are expected to hit $75 billion this year, while maintaining its bottom line against the threat of competing AI offerings, as well as antitrust enforcement. Google's DeepMind AI unit also competes directly with OpenAI and Anthropic in a race to develop the best models and integrate those advances into consumer applications. Selling computing power reduces Google's own supply of chips while bolstering capacity-constrained rivals. The OpenAI deal will further complicate how Alphabet CEO Sundar Pichai allocates the capacity between the competing interests of Google's enterprise and consumer business segments. Google already lacked sufficient capacity to meet its cloud customers' demands as of the last quarter, Chief Financial Officer Anat Ashkenazi told analysts in April. Although ChatGPT holds a large lead over Google's competing chatbot in terms of monthly users and analysts have predicted it could reduce Google's dominant search market share, Pichai has brushed aside concerns that OpenAI will usurp Google's business dominance.

Why OpenAI's Google Deal Is Key in Its Efforts to Decouple from Microsoft | Investing.com UK

OpenAI's reported unprecedented cloud deal with Google Cloud Platform (NASDAQ:GOOG) marks a strategic turning point in the artificial intelligence sector's competitive landscape. The agreement, finalized in May 2025 after months of negotiations, represents OpenAI's most significant move yet to diversify its computing infrastructure beyond Microsoft's (NASDAQ:MSFT) Azure platform. This partnership between two AI rivals underscores the critical importance of compute capacity in the rapidly evolving AI market and signals a fundamental shift in how leading AI companies are managing their infrastructure dependencies. The Google Cloud partnership represents OpenAI's efforts to reduce dependency on Microsoft, whose Azure service had served as the ChatGPT maker's exclusive data center infrastructure provider until January 2025. According to a recent report, Google and OpenAI had allegedly discussed this arrangement for months but were previously blocked from signing due to OpenAI's exclusive lock-in with Microsoft. Beyond the Google partnership, OpenAI has been aggressively diversifying its compute sources through multiple strategic initiatives. Earlier in 2025, the company partnered with SoftBank and Oracle (NYSE:ORCL) on the $500 billion Stargate infrastructure program and signed deals worth billions with CoreWeave (NASDAQ:CRWV) for additional compute capacity. Most significantly, OpenAI is on track to finalize the design of its first in-house chip this year, which could dramatically reduce its dependency on external hardware providers and give the company greater control over its technological destiny. This multi-pronged approach reflects the critical importance of computing in the AI industry, where massive computational demands for training large language models and running inference have become the primary bottleneck for scaling AI services. OpenAI's strategy demonstrates how leading AI companies are treating infrastructure independence as a core competitive advantage rather than merely an operational necessity. Google's parent company Alphabet (NASDAQ:GOOGL) saw its stock price rise to $181.11, gaining 1.96% as of June 10, 2025, with the market responding positively to the OpenAI partnership announcement. The stock has shown resilience despite a challenging year-to-date performance of -4.68%, significantly underperforming the S&P 500's 2.36% gain. However, Google Cloud's strong fundamentals remain evident with Q1 2025 revenue increasing 28% year-over-year to $12.3 billion, generating an annual run rate of $49.2 billion and outpacing Google Services' 10% growth rate. Microsoft's stock performance tells a different story, with shares trading at $469.00, down 0.79% on the day despite maintaining stronger overall market performance. The company's year-to-date return of 11.70% significantly outperforms both Google and the broader market, reflecting investor confidence in Microsoft's diversified AI strategy. Microsoft's Azure cloud service generated $26.75 billion in Q1 revenue, more than double Google Cloud's performance, with an annual run rate of $107 billion demonstrating the platform's continued enterprise dominance. The contrasting stock movements highlight how investors are weighing the long-term implications of the OpenAI partnership. While Microsoft maintains its revenue leadership in cloud services, Google's successful capture of OpenAI as a customer validates its strategy of positioning itself as a neutral arbiter of computing resources, potentially signaling future market share gains in the lucrative AI infrastructure sector. The three dominant hyperscalers are locked in an unprecedented infrastructure arms race, with combined capital expenditures reaching historic levels to meet surging AI demand. Google leads the charge with a $75 billion investment plan for 2025 to expand AI and cloud capacity, while Microsoft has pledged $80 billion to data center buildouts during its current fiscal year. Amazon (NASDAQ:AMZN) completes the trio with a $100 billion infrastructure investment plan, as generative AI-specific cloud consumption more than doubled in 2024. This massive spending surge reflects the hyperscalers' recognition that infrastructure capacity has become the ultimate competitive moat in the AI era. The three providers collectively hold 65% of the global cloud market, with AWS maintaining 31% market share, Microsoft Azure at 22%, and Google Cloud Platform at 12%. However, Google Cloud's 28% year-over-year growth rate in Q1 2025 outpaced both Microsoft's 21% and Amazon's 17%, suggesting the competitive dynamics are shifting as AI workloads reshape customer preferences. The battle extends beyond pure capacity to encompass technological differentiation, with each hyperscaler developing specialized AI chips and services. Google's 7th generation Tensor Processing Unit "Ironwood" reportedly delivers 24x greater performance than leading supercomputers, while Microsoft's integration of OpenAI through Copilot creates ecosystem lock-in. *** Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.

OpenAI to use Google cloud service alongside Microsoft By Investing.com

Investing.com -- OpenAI plans to add Alphabet (NASDAQ:GOOGL)'s Google cloud service to its computing resources, marking a surprise partnership between two major competitors in the artificial intelligence field. The agreement, which was under negotiation for several months, was completed in May, according to a Reuters report on Tuesday. This move highlights the growing need for computing capacity in the industry. For OpenAI, this represents another step to expand its computing sources beyond Microsoft (NASDAQ:MSFT), its primary backer. The company has already been working on its Stargate data center project as part of this diversification strategy. Google's cloud division will provide additional computing capacity to supplement OpenAI's existing infrastructure for both training and running its AI models. This arrangement comes at a time when OpenAI's ChatGPT is considered a major challenge to Google's search business dominance. Google executives have recently stated that the competition in AI might not result in a single winner taking the entire market.