OpenAI Taps Google In "Unprecedented" Cloud Deal, Snubbing Core Supporter Microsoft

OpenAI, despite receiving billions of equity capital from Microsoft, has chosen to add Alphabet's Google cloud to meet its growing computing needs, marking a surprising collaboration between two prominent AI competitors. The deal, finalized in May, underscores the massive computing demands required to train and deploy AI. This move is a win for Google's cloud unit, which will supply additional computing capacity to OpenAI's existing infrastructure. OpenAI's ChatGPT poses a significant threat to Google's dominant search business, with Google executives acknowledging that the AI race may not be winner-take-all. Since ChatGPT's launch, OpenAI has faced increasing needs for compute to train large models and run inference. The company has partnered with SoftBank and Oracle on the Stargate infrastructure program and signed deals worth billions with CoreWeave for more compute. OpenAI is also designing its first in-house chip, which could reduce its dependency on external hardware providers. The partnership with Google is the latest maneuver by OpenAI to reduce its dependency on Microsoft, whose Azure cloud service had served as OpenAI's exclusive data center infrastructure provider until January. Google's addition of OpenAI to its customer list shows how the tech giant has capitalized on its in-house AI technology to accelerate the growth of its cloud business.