Sundar Pichai on Google Cloud's OpenAI Partnership - Latest News

Google and OpenAI Forge a Cloud Partnership

Sundar Pichai, CEO of Google, has expressed considerable enthusiasm regarding a new partnership with OpenAI, a primary competitor in the field of artificial intelligence. This collaboration will involve Google providing OpenAI with cloud computing resources for both the training and deployment of its AI models.

Details of the Agreement

During Google’s second-quarter earnings call, Pichai stated, “We are very excited to be partnering with OpenAI on Google Cloud.” He emphasized Google Cloud’s nature as an open platform with a proven track record of supporting numerous companies, including startups and AI research facilities. Further investment and growth within this relationship are anticipated.

AI Investment and Competitive Landscape

This announcement followed inquiries from analysts concerning the potential impact of AI on Google’s core search functionality. Questions were also raised regarding the $10 billion increase in Google’s capital expenditures, allocated to accelerate its progress in the AI sector.

Approximately two and a half years after the introduction of ChatGPT, Google has strategically redirected its focus towards the development of advanced AI models and products designed to compete directly with OpenAI.

A Complex Relationship

While ChatGPT poses a significant challenge to Google Search, the agreement with OpenAI represents a substantial new client for Google Cloud. However, this partnership presents a delicate situation for Google, as OpenAI could potentially leverage Google’s infrastructure and chips to disrupt Google’s primary Search product.

Expanding Cloud Services

OpenAI recently acknowledged Google Cloud as a supplier of cloud computing services, listing it alongside Microsoft and Oracle. Prior reports from Reuters in June indicated OpenAI was evaluating the possibility of utilizing Google Cloud to augment its computational capabilities.

Google Cloud Revenue Growth

Google Cloud’s revenue experienced a significant increase in the second quarter of 2025, reaching $13.6 billion, a rise from $10.3 billion during the same period last year. A considerable portion of this growth is attributed to the Google Cloud Platform and its offerings to AI-focused companies.

Although still smaller in scale compared to Google Search, Google Cloud appears to be thriving in the current AI landscape.

Attracting AI Labs

Several prominent AI labs, including Anthropic, Safe Superintelligence (led by Ilya Sutskever), and World Labs (founded by Fei-Fei Li), have chosen Google Cloud as their cloud computing partner. Pichai highlighted the company’s success in securing these deals, citing its ample supply of Nvidia GPU chips and internally developed TPU chips.

Nvidia GPU Constraints and Microsoft

Google Cloud presents a strategic partnership opportunity for OpenAI, which currently faces limitations in accessing Nvidia GPUs – essential for training and serving AI models to its vast user base. These limitations have created friction with Microsoft, OpenAI’s primary financial backer and cloud provider, prompting the company to explore alternative cloud solutions.

Progress with Google’s AI Products

Google reports positive progress with its own AI products. The Gemini chatbot now boasts 450 million monthly active users, while AI Overviews reaches 2 billion monthly active users. The monetization strategy for these products and their impact on Google Search query volume remain areas of ongoing assessment.

Historical Parallels and Future Outlook

Despite Pichai’s stated enthusiasm, it’s reasonable to question the sincerity of his excitement regarding collaboration with OpenAI, a company that poses an existential threat to Google Search. This partnership echoes Google’s earlier arrangement with Yahoo, where Google, as a nascent company, utilized Yahoo’s platform to accelerate its growth and ultimately surpass it as the dominant internet gateway.

The longevity of OpenAI’s relationship with Google remains uncertain.