The news: Meta will spend more than $10 billion on Google Cloud over six years, making it one of Google’s largest-ever contracts, per CNBC. 

Despite running its own data centers and using Amazon Web Services (AWS) and Microsoft Azure, Meta’s growth requires additional cloud capacity. The deal demonstrates how even fierce ad rivals can align when AI demands massive computing scale. 

However, the alliance could be risky. If Meta’s models and workflows become tightly integrated with Google’s ecosystem, switching providers could be costly and disruptive.

Another big win for Google: The Meta contract comes on the heels of Google’s cloud deal with OpenAI, giving the search giant rare momentum as it competes with AWS and Azure.

• Google’s AI-optimized Tensor Processing Units (TPUs) attract rivals like OpenAI and even Apple, which is employing more than 10,000 processors designed by Google to develop its AI models.
• Securing Meta, one of the largest AI investors, bolsters Google’s credibility in hosting frontier AI workloads.
• By powering competitors, Google is quickly cementing its position as the neutral infrastructure choice for cutting-edge AI.

Meta’s hunger for cloud computing: The agreement centers on AI infrastructure as Meta accelerates investment in its Llama models and AI-driven features across Facebook, Instagram, and WhatsApp.

Meta forecast 2025 expenses to reach between $114 billion and $118 billion, per CNBC, with heavy spending on AI hardware, data centers, and talent. It needs multiple providers to ensure redundancy, scale, and coverage—illustrating just how vast its AI ambitions have become.

Our take: When it comes to AI, the old rules of competition no longer apply. Cloud rivals are forced into uneasy alliances to remain competitive as infrastructure demand explodes. 

For AWS and Azure, keeping pace with Google Cloud means doubling down on custom silicon, broadening AI partnerships, and proving they can deliver the scale and neutrality that Google is now signaling to the market.

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