Meta Platforms (META) has signed a cloud deal worth more than $10 billion with Alphabet’s (GOOGL) Google to power its massive artificial intelligence (AI) ambitions. Under the deal, Meta will use Google’s cloud servers, storage, and networking services for a period of six years.
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The deal represents a historic win for both Meta and Google. While the two remain fierce competitors in digital advertising, AI, and virtual reality, they have agreed to collaborate on critical infrastructure. Let’s see why this arrangement is a win-win for both tech giants.
Google Wins its Largest Cloud Deal in History
Google Cloud has secured its largest deals in history, marking a major victory in its competition with hyperscalers Microsoft (MSFT) and Amazon Web Services (AMZN). Recently, Google also onboarded ChatGPT maker OpenAI as its cloud customer, helping it capture a greater share in the AI-driven cloud market. Google’s Cloud unit offers a mix of productivity software as well as infrastructure services.
In its Q2FY25 results, Alphabet reported that Google Cloud generated $13.6 billion in revenue, up 31.4% year-over-year. This growth outpaced the company’s overall revenue increase of 13.8%. Analysts believe that if Google continues to secure such mega-deals, it will solidify its position in the enterprise cloud market and help narrow the gap with AWS and Microsoft.
Meta Secures Critical Infrastructure for AI Ambitions
In July, CEO Mark Zuckerberg announced that Meta plans to invest “hundreds of billions of dollars” to accelerate its AI efforts. The company already runs its own data centers to train Llama models and has integrated generative AI across Instagram, Facebook, and WhatsApp. Zuckerberg has also created a dedicated Superintelligence team by poaching top talent from rivals.
For years, Meta has relied heavily on its own data centers, but in recent years, it has adopted a “multi-cloud” strategy. Meta has also partnered with AWS and Microsoft Azure, while renting cloud servers from Oracle (ORCL) and CoreWeave (CRWV).
Meta’s $10 billion deal with Google positions it as one of the world’s largest cloud customers, alongside Apple (AAPL) and OpenAI. By adding Google Cloud to its vendor list, Meta not only strengthens its bargaining position but also expands its global service capabilities.
META vs. GOOGL: Which Is the Better Tech Stock?
According to TipRanks’ Stock Comparison Tool, both META and GOOGL have earned Wall Street’s “Strong Buy” consensus rating. However, META offers a higher upside potential of 18% over the next twelve months. Investors may choose to invest in either stock after conducting thorough research.
