OpenAI Is Now Using Google Cloud. And It’s A Bigger Deal Than You Think
If you saw the recent news that OpenAI just signed a cloud deal with Google, you might’ve thought: “Just another tech company signing with a cloud provider.” But take a closer look at the arrangement and you’ll understand why this will likely be remembered as a watershed moment in AI development.
Why? Because OpenAI (the company behind ChatGPT) is now paying Google, one of its biggest rivals, to help power its products.
That bears repeating. The same OpenAI that’s challenging Google’s search engine supremacy is now also its cloud customer.
Why Would OpenAI Do That?
Since ChatGPT launched in late 2022, demand has skyrocketed. Everyone’s using it; hundreds of millions of users, massive enterprise deals, new models, and more. All of that requires one thing: a ton of computing power.
OpenAI has been using Microsoft Azure as its main cloud provider for years. Microsoft has invested billions into the company and built ChatGPT into everything from Word to Bing. But even Microsoft’s cloud can’t keep up with OpenAI’s demand.
OpenAI went looking for alternate sources of computing power, and that led to a deal with Google Cloud to help carry the load.
This is bigger than a simple vendor decision. Think about it: OpenAI is now paying one of its top competitors to keep growing. That’s like Coke hiring Pepsi to bottle Coke products when Coke’s own bottling plants run out of capacity. It doesn’t happen unless it absolutely has to.
Here’s what it tells us:
Even the biggest cloud providers have limits.
Scaling AI is hard, and expensive.
Rivals are going to need each other.
Why Would Google Do That?
For Google, this is a huge credibility boost for Google Cloud. It shows that their infrastructure is so reliable that even their competitors want to make use of it. According to Reuters, Google Cloud made $43 billion last year (roughly 12 percent of Alphabet’s revenue) and is trying to catch up with Amazon and Microsoft in the cloud space. Landing OpenAI as a client helps make that case loud and clear.
Investors took notice. On the day the deal was announced, Alphabet (Google’s parent company) stock went up 2.1 percent while Microsoft’s stock slipped.
There are only a few companies in the world that can provide the kind of computing power AI companies need: Amazon (AWS), Microsoft (Azure), and Google (Google Cloud Platform). That’s it. The demand for chips and computing power is so high that even giants like OpenAI have to mix and match to get what they need.
What This Means Going Forward
There are a few big takeaways from this:
OpenAI is becoming less tied to Microsoft. They still have a strong partnership, but now OpenAI has more options…and more leverage.
Google Cloud looks more neutral. They’re willing to work with anyone, even a competitor, to grow their business.
Multicloud is becoming the new normal. Startups and big players alike are realizing they need backup options, and lots of compute sources.
OpenAI isn’t just building AI anymore. They’re managing a global tech operation that needs every cloud partner it can get.
The AI space is changing fast. This deal between OpenAI and Google shows that even the most competitive companies will work together when the stakes are high enough. The race isn’t just about who has the best models -- it’s about who can run them reliably, affordably, and at scale.