Exclusive: OpenAI taps Google in unprecedented cloud deal despite AI rivalry, sources say

SAN FRANCISCO, - OpenAI plans to add Alphabet's (GOOGL.O, opens new tab Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector.

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Exclusive: OpenAI taps Google in unprecedented cloud deal despite AI rivalry, sources say

By Kenrick Cai and Krystal Hu

June 10, 202510:52 PM GMT+5:30Updated June 11, 2025

Item 1 of 3 OpenAI logo is seen in this illustration taken February 8, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

[1/3]OpenAI logo is seen in this illustration taken February 8, 2025. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights, opens new tab

Summary

Companies

Deal reshapes AI competitive dynamics, Google expands compute availability

OpenAI reduces dependency on Microsoft by turning to Google

Google faces pressure to balance its external cloud offering and AI development

SAN FRANCISCO, June 10 (Reuters) - OpenAI plans to add Alphabet's (GOOGL.O), opens new tab Google cloud service to meet its growing needs for computing capacity, three sources told Reuters, marking a surprising collaboration between two prominent competitors in the artificial intelligence sector.

The deal, which has been under discussion for a few months, was finalized in May, one of the sources added. It underscores how massive computing demands to train and deploy AI models are reshaping the competitive dynamics in AI, and marks OpenAI's latest move to diversify its compute sources beyond its major supporter Microsoft (MSFT.O), opens new tab, including its high-profile Stargate data center project.

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It is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure for training and running its AI models, sources said, who requested anonymity to discuss private matters. The move also comes as OpenAI's ChatGPT poses the biggest threat to Google's dominant search business in years, with Google executives recently saying that the AI race may not be winner-take-all.

OpenAI, Google and Microsoft declined to comment. Alphabet's stock was up 2.1% on Tuesday afternoon following the news, while Microsoft shares were down 0.6%.

Scotiabank analysts called the development "somewhat surprising" in a note on Tuesday, highlighting the growth opportunities for Google's Cloud unit, while expressing caution regarding competition from ChatGPT.

"The deal ... underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands. 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 analysts wrote.