Google Cloud Scores $10B AI Win Over Meta in Rivalry Twist

Meta Platforms Inc. (META) has entered into a significant six-year cloud services agreement with Alphabet Inc.’s (GOOGL) Google Cloud, valued at over $10 billion, according to multiple sources familiar with the deal. The agreement centers on Google Cloud providing infrastructure support for Meta’s artificial intelligence initiatives, aligning with the company’s broader strategy to expand its AI capabilities and integrate them across its product portfolio. The deal was first reported by The Information and later confirmed by Reuters and CNBC, citing unnamed individuals with knowledge of the matter [1].

Under the terms of the deal, Meta will utilize Google’s cloud infrastructure, including servers, storage, and networking, to power its AI operations. This partnership marks a strategic shift for Meta, which has historically managed its own data centers and engaged with cloud providers like Amazon Web Services (AWS) and Microsoft Azure. The new agreement with Google comes at a time when Meta is seeking to offload $2 billion in data center assets to reduce capital expenditures and focus more on outsourcing infrastructure needs. This move underscores the growing importance of AI in Meta’s business strategy and the company’s need for scalable and flexible cloud resources [2].

For Google Cloud, the deal is a significant win in its ongoing competition with AWS and Azure. Alphabet’s Google Cloud has been striving to increase its market share in the highly competitive cloud services sector, which is dominated by Amazon and Microsoft. The deal is expected to provide a meaningful revenue boost for Google Cloud, which reported $13.6 billion in revenue for the second quarter of 2025, with $2.83 billion in operating income. The 32% year-over-year revenue growth for Google Cloud highlights the unit’s continued expansion in a fast-evolving market [3].

The collaboration between Meta and Google is particularly noteworthy given their historical rivalry, particularly in the online advertising space. Despite this, both companies have found common ground in the AI-driven digital transformation that is reshaping the technology industry. Meta’s investment in AI infrastructure is expected to continue in 2025, with the company forecasting total expenses of between $114 billion and $118 billion. This includes significant spending on AI development, particularly on its Llama family of AI models and broader AI integrations across its platforms [2].

The broader cloud market is also evolving rapidly, with AI becoming a central component of cloud computing strategies. Microsoft Azure, for instance, has been investing heavily in AI, with $80 billion allocated to AI and data center expansion in 2025 alone. AWS continues to lead in terms of infrastructure scale and service breadth, while Google Cloud is leveraging its AI and data analytics strengths to attract clients like OpenAI, which has previously relied on Microsoft for cloud services. Meta’s decision to partner with Google Cloud reflects the growing importance of AI-specific infrastructure and the competitive positioning of cloud providers in this space [4].

Google declined to comment on the specifics of the deal with Meta, but the broader context suggests the agreement is part of a larger trend in the tech industry where AI infrastructure is becoming a key battleground. The $10 billion contract is expected to bolster Google’s position in the cloud market and provide valuable long-term revenue for its AI-focused services. As AI becomes increasingly integral to digital services, such strategic partnerships will likely continue to shape the competitive landscape of the technology sector [2].

Source:

[1] Meta Signs Over $10 Billion Cloud Deal With Google, Source Says (https://www.reuters.com/business/meta-signs-over-10-billion-cloud-deal-with-google-source-says-2025-08-21/)

[2] Google Scores Six-Year Meta Cloud Deal Worth Over $10 (https://www.cnbc.com/2025/08/21/google-scores-six-year-meta-cloud-deal-worth-over-10-billion.html)

[3] Meta, Google Reportedly Sign $10 Billion AI Cloud (https://www.investors.com/news/technology/meta-google-sign-10-billion-ai-cloud-services-deal/)

[4] How the Cloud Battle: Azure vs AWS and Google Has Evolved in 2025 (https://www.fordway.com/how-the-cloud-battle-azure-vs-aws-and-google-has-evolved-in-2025)