The news: Google and PayPal ink multiyear partnership for commerce solution with a focus on agentic AI, per a press release.

What this entails: Google and PayPal will join forces to create new AI shopping experiences, integrate PayPal’s branded checkout, Hyperwallet, and PayPal Payouts across Google’s platforms.

Google will also enable PayPal’s enterprise payment solutions across Google Cloud, Ads, and Play.

How we got here: PayPal has been working to position itself as a key player in the AI landscape. 

It notched a partnership with Perplexity to power AI shopping across Perplexity Pro, and sealed an additional deal to get PayPal and Venmo users early access to Perplexity’s Comet browser. By also partnering with Google, PayPal is sidling up to perceived current leaders in the AI browser war to secure AI-fueled shopping volume.

Google and PayPal ended their prior relationship that allowed PayPal on Google Wallet back in June. This may have been in preparation for the deeper tie-in, or a push for PayPal itself to get users to upload their PayPal Debit Mastercards into the Wallet to boost card volume. 

Why PayPal? PayPal’s advanced infrastructure, especially among enterprise solutions, likely drove Google to add PayPal, a key rival to Google Pay, among its platforms. 

Otherwise, it’s a confusing move from Google to elevate a direct competitor in what could be the next frontier of digital commerce—agentic commerce—when it should be buoying its own buy button.

Our take: Google and PayPal’s surprising partnership reflects the ongoing scramble to secure the best positioning in the Wild West of AI development. 

All players want to have an early mover advantage; that can incentivize unlikely partnerships to avoid falling behind rapidly evolving technology.

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