OpenAI strikes cloud services deal with Google despite rivalry

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OpenAI has signed a surprising deal with Google to use its cloud services, despite the fact that the two companies are direct competitors in the AI space. 

According to a report from Reuters, OpenAI is turning to Google Cloud to help handle its growing need for computing power, a crucial resource for training and running large AI models like ChatGPT.

The exact details of the agreement haven’t been made public, but the deal has reportedly been in the works for several months. 

This move is part of OpenAI’s effort to diversify where it gets its computing power from, especially after relying heavily on Microsoft’s Azure cloud platform in the past.

Until earlier this year, Microsoft was OpenAI’s exclusive cloud provider. But after delays in product rollouts, OpenAI CEO Sam Altman blamed limited computing availability. 

As a result, OpenAI started branching out. 

In March, it signed a massive $12 billion deal with CoreWeave, another cloud provider. Even though Azure is no longer the only player in OpenAI’s cloud operations, Microsoft is still a key partner. 

OpenAI continues to use Azure heavily and is currently renegotiating the terms of that partnership, including Microsoft’s financial stake in the company.

The deal with Google is a major boost for Google Cloud, which earned $43 billion last year and made up 12% of Google’s total revenue. 

Having OpenAI as a customer could significantly increase those numbers. 

It’s also interesting because ChatGPT is seen as a major threat to Google Search, so this deal may signal a more cooperative relationship between the two tech giants.

However, one concern is whether Google Cloud can keep up with demand. 

It has previously struggled to provide enough computing power for all its customers, and adding a massive user like OpenAI could stretch its resources even thinner. Some wonder whether OpenAI will get priority over existing clients. 

As for OpenAI, the company is thriving. 

It recently reported a run rate of $10 billion in annual revenue and expects to hit $12 billion by the end of the year, boosted by increasing demand for its AI tools and new subscribers.

What do you think about this interesting deal between two AI heavyweights? Do you think OpenAI should look elsewhere? Tell us your thoughts below in the comments, or via our Twitter or Facebook.