Meta Platforms Inc. (NASDAQ:META) has reportedly signed an agreement to spend more than $10 billion on Alphabet Inc.'s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google Cloud services.
Meta Inks Six-Year AI Cloud Deal With Google To Boost Llama Models
The deal spans six years and is largely focused on AI infrastructure, reported CNBC, citing two people familiar with the matter.
As per the report, the agreement reflects Meta's need for massive computing power as it scales its Llama family of open-source AI models and integrates generative AI across Facebook, Instagram and WhatsApp.
The deal also marks a major win for Google Cloud as it seeks to catch up with larger competitors Amazon.com, Inc.'s (NASDAQ:AMZN) Web Services and Microsoft Corporation's (NASDAQ:MSFT) Azure.
Earlier this year, Google also secured OpenAI as a customer, chipping away at Microsoft's dominant position in the AI cloud space.
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Zuckerberg-Led Meta's AI Spending Push, Google Gains Cloud Ground
In its July earnings report, Meta projected total 2025 expenses between $114 billion and $118 billion, with a large portion allocated to AI infrastructure and talent.
Alphabet reported in July that its Google Cloud unit generated $13.6 billion in second-quarter revenue, up from $10.35 billion year-over-year.
Analysts say such mega-deals reinforce Google's bid to win more enterprise contracts and narrow the gap with AWS and Microsoft.
From Fierce Rivals To Now Partners
Meta and Google have been fierce competitors in online advertising, but Meta's growing AI ambitions require extensive cloud infrastructure.
Zuckerberg's tech giant already runs its own data centers and has committed to leveraging cloud services from Amazon and Microsoft as well, the report said.
Meta's cloud pact with Google comes as the company simultaneously partners with AWS on a $6 million startup program to expand Llama adoption.
CEO Mark Zuckerberg has also created a superintelligence team, poaching top researchers from OpenAI and rivals. The company reportedly froze AI hiring following a surge in costly talent acquisitions.
Price Action: Alphabet Inc.’s Class A shares rose 0.22% to $199.75 on Thursday, while Class C shares climbed 0.21% to $200.62. In contrast, Meta shares fell 1.15%, closing at $739.10, according to Benzinga Pro data.
Benzinga’s Edge Stock Rankings show that GOOG continues to exhibit a strong price trend across short, medium and long-term timeframes, with detailed performance metrics available here.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
