Introduction to OpenAI and Google Partnership
OpenAI is turning to Google for help with its growing computing needs, three sources have told Reuters. The move is unexpected given the rivalry between the two in artificial intelligence, but it reflects the massive demand for computing power to train and run AI models.
The Deal Between OpenAI and Google
One of the three sources said the deal was finalized in May after months of discussion. OpenAI has been working to ease its reliance on Microsoft by adding other cloud providers to meet growing demand. That includes supporting large-scale efforts like its Stargate project and keeping up with commitments made in recent deals with chipmakers and infrastructure vendors. For Google, the deal brings a new high-profile customer to its cloud platform. The company will provide extra computing resources to support OpenAI’s AI training and model operations, the sources said.
Impact on Google’s Business
This comes as ChatGPT continues to challenge Google’s core search business. Still, Google executives recently acknowledged that there may be room for more than one winner in the AI space. OpenAI, Google, and Microsoft declined to comment. Since launching ChatGPT in late 2022, OpenAI has faced growing pressure to scale up its compute capacity – both for training large language models and for inference, or running those models in real time.
OpenAI’s Growing Revenue
On Monday, OpenAI said its annualized revenue had reached $10 billion as of June 2025, fueled by rising use of its tools. Earlier this year, OpenAI teamed with SoftBank and Oracle on the $500 billion Stargate infrastructure effort and signed multi-billion-dollar agreements with CoreWeave. The company is also working on designing its own chip to cut back on outside hardware use, Reuters reported in February.
Shift in OpenAI’s Reliance on Microsoft
The deal with Google follows a shift earlier this year that ended OpenAI’s exclusive reliance on Microsoft’s Azure. A person familiar with the situation said OpenAI and Google had been in talks for a while, but existing agreements with Microsoft had delayed any deal. Microsoft and OpenAI are now reworking the terms of their partnership, including Microsoft’s future ownership stake.
Google’s Expansion of Cloud Business
For Google, the timing lines up with its push to expand use of its in-house chips, called tensor processing units or TPUs. TPUs were once limited to internal projects but are now being used by outside clients, including Apple and OpenAI competitors including Anthropic and Safe Superintelligence. Adding OpenAI to its cloud customer list gives Google another way to grow its cloud business, which brought in $43 billion last year – about 12% of Alphabet’s total revenue.
Challenges Faced by Google
Google faces its own pressures. The company is pouring money into AI and expects capital spending to reach $75 billion this year. At the same time, it’s under scrutiny from regulators and pressure from investors who want to see returns on their billions. Internally, the deal adds another layer of complexity. Google’s AI lab DeepMind competes with OpenAI, and selling computing power to a rival can create tension over how resources are shared.
Conclusion
The partnership between OpenAI and Google reflects the rapidly evolving landscape of artificial intelligence and cloud computing. As demand for computing power continues to grow, companies are forming unexpected alliances to stay ahead in the game. The deal is a significant milestone for both OpenAI and Google, and its impact will be closely watched in the coming months.
FAQs
- Q: What is the nature of the partnership between OpenAI and Google?
A: The partnership involves Google providing extra computing resources to support OpenAI’s AI training and model operations. - Q: Why is the partnership unexpected?
A: The partnership is unexpected given the rivalry between OpenAI and Google in the field of artificial intelligence. - Q: What are the benefits of the partnership for Google?
A: The partnership brings a new high-profile customer to Google’s cloud platform and provides an opportunity for Google to grow its cloud business. - Q: What are the challenges faced by Google in this partnership?
A: Google faces challenges such as scrutiny from regulators, pressure from investors, and internal complexity due to the competition between its AI lab DeepMind and OpenAI.
