OpenAI Turns To Google Cloud Despite AI Rivalry

In an exclusive report by Reuters, OpenAI has teamed up with Google to meet its expanding computing requirements.

The deal between OpenAI and Google Cloud was finalized in May, after OpenAI shifted away from Microsoft Azure as its primary cloud infrastructure, as noted by Reuters.

The partnership comes at a time when OpenAI’s ChatGPT is considered one of the biggest threats to Google’s search dominance. However, both organizations put aside their competitive interests to support the substantial computing requirements needed for developing, and operating sophisticated AI models.

The deal “underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands,” Scotiabank analysts wrote, as reported by Reuters.

“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,” the analysis added,

Alphabet’s stock rose 2.1% after the news, while Microsoft fell 0.6%, observed Reuters.

The launch of ChatGPT in late 2022 triggered OpenAI to expand its infrastructure at a rapid pace. The company formed partnerships with Oracle and SoftBank to support its $500 billion Stargate project, and secured billions of dollars in deals from CoreWeave, as noted by Reuters. Additionally, OpenAI also plans to launch its own chip to reduce reliance on outside providers.

The acquisition of OpenAI as a customer demonstrates the increasing market demand for Google’s cloud services and in-house AI chips. But it also complicates things. Reuters however notes that the tech company faces difficulties in meeting cloud customer requirements, while its DeepMind division competes directly with OpenAI.

Reuter reports that OpenAI, Google, and Microsoft all declined to comment. While the AI race remains fierce, this partnership shows that even top competitors may have to collaborate, at least when it comes to computers.