It’s almost like Hobbs and Shaw—two heavyweights putting rivalry aside and teaming up against a common enemy: computing power.
According to a June 10 Reuters report, OpenAI plans to add Alphabet’s Google Cloud service to its list of compute providers. The cloud support will assist OpenAI in training its AI models and meeting the massive computational demands for its jobs, sources told Reuters.
The move raised eyebrows from analysts, given the two companies’ competition.
“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,” Scotiabank examiners wrote in a Tuesday note.
Compete, compute. In addition to search, both companies compete as AI builders. Alphabet’s Google DeepMind lab has created models like Gemini 2.5, while OpenAI has introduced recent LLMs like OpenAI o3 and o4-mini.
Open book. OpenAI has reportedly reached $10 billion in annual recurring revenue, less than three years after launching ChatGPT in November 2022. The popular tool (which recently experienced an outage) had 500 million weekly active users as of March, according to the company (along with three million paying business users).
The company’s CEO Sam Altman has been open(AI) about the company’s need for power. “I think compute is going to be the currency of the future,” he said on the Lex Fridman Podcast one year ago. “I think it’ll be the most precious commodity in the world.” (He also tweeted in March that the company’s GenAI tool was melting its GPUs.)
Howdy, partner. The Google and OpenAI partnership—finalized in May—adds to recent deals for OpenAI to gather computing capacity. The company signed a $4 billion dollar agreement with cloud startup CoreWeave in May, and announced in January a $500 billion investment in the AI infrastructure-building Stargate project.
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Alphabet has been enthusiastic about its Google Cloud usage and growth. In its most recent earnings call, the company highlighted its GPU offerings, including Nvidia’s B200 and GB200 Blackwell chips, and its custom-designed tensor processing units (TPUs). The Google Cloud Next conference in April showcased many business uses, like the introduction of AI security-focused agents for Dunn and Bradstreet, Google shared on its blog, and on-premise Gemini models for Nvidia and Dell.
According to Alphabet’s Q1 earnings report, Google Cloud revenue increased by 28% year over year to $12.3 billion.
Surprise! The OpenAI and Google deal surprised one Gartner analyst—only because it took so long.
“I anticipate that OpenAI and Google and other frontier model innovators will continue innovating and exploring frontiers of infrastructures and model capabilities. Today the needs overlap, hence the mutually beneficial partnership,” Chirag Dekate, VP analyst at Gartner, wrote in an email to IT Brew.
He warned, however, Google now has to balance TPU usage among its cloud clients and internal projects like DeepMind. An agreement with a growing AI giant like OpenAI complicates resource planning.
“GPU leaders must redouble their efforts to lower cost structures for clients,” Dekate wrote.
Neither OpenAI nor Google responded to June 10 requests for comment about specifics of the partnership and how the partnership will benefit their respective companies.