The six-year agreement reportedly gives Meta the compute power to support its AI expansion
In sum – what to know:
Meta signs $10B AI deal – The six-year agreement reportedly gives Meta the compute power to support its AI expansion, including plans for 1.3 million GPUs and 1 GW capacity in 2025.
Boost for Google Cloud – The partnership strengthens Alphabet’s fight against AWS and Microsoft Azure, with Google Cloud reporting 32% revenue growth and a backlog exceeding $100B.
Even as investors worry about a potential AI bubble, multi-billion-dollar deals continue to pour in. The latest: Meta Platforms has reportedly signed an AI compute deal with Google Cloud worth more than $10 billion.
The news was first reported by the The Information, which claims to have received confirmation from Google Cloud. Other outlets, including Bloomberg and Reuters picked up the story, supplying additional details. They reported that the deal covers a period of six years and will act as a boon for Google Cloud as it battles rivals Amazon Web Services (AWS) and Microsoft Azure in its AI ambitions.
Last month, Meta surged past expectations for its second quarter results, delivering revenues that grew 22% year-over-year to $47.52 billion, and net income of $18.3 billion, a 36% jump from the same time last year. In some commentary on the quarterly call as well as a public letter, CEO Mark Zuckerberg laid out Meta’s perspective on the evolution of AI, and what AI will mean for humanity.
“Meta’s vision,” he said, “is to bring personal superintelligence to everyone. We believe in putting this power in people’s hands to direct it towards what they value in their own lives.
Meta Platforms has previously said its committed to expanding its data center capacity to the tune of roughly 1 gigawatt of compute power in 2025 and more than 1.3 million GPUs. This expansion is reportedly a key focus of the company’s arrangement with Google Cloud.
Google Cloud’s parent company Alphabet also delivered strong second-quarter results, with Google Cloud seeing more than 30% revenue growth year-on-year, and according to reporting by RCR’s Kelly Hill, Google Cloud was a “small but mighty contributor” to these Q2 earnings. The business unit saw its revenues jump 32% compared to the same time last year, to $13.6 billion. Its backlog was up 38% year-over-year and now exceeds $100 billion.
“AI is positively impacting every part of the business, driving strong momentum,” said CEO Sundar Pichai during the quarterly call.
A previous collaboration between the companies offered access to Meta Platforms’ Llama AI model on Google Cloud developer platform Vertex AI, but this deal is the first between the pair involving cloud computing.
