It isn’t your imagination; Google Cloud is flooding the zone

The $100 billion concern betwixt Nvidia and OpenAI, announced Monday, represents – for present – the latest mega-deal reshaping the AI infrastructure landscape. The statement involves non-voting shares tied to monolithic spot purchases and capable computing powerfulness for much than 5 cardinal U.S. households, deepening the communal dependence betwixt 2 of AI’s astir almighty players.

Meanwhile, Google Cloud is placing a antithetic stake entirely. While the industry’s biggest players cement ever-tighter partnerships, Google is hellbent connected capturing the adjacent procreation of AI companies earlier they go excessively large to court.

Francis deSouza, its COO, has seen the AI gyration from aggregate vantage points. As the erstwhile CEO of genomics elephantine Illumina, helium watched instrumentality learning alteration cause discovery. As co-founder of a two-year-old AI alignment startup, Synth Labs, helium has grappled with the information challenges of progressively almighty models. Now, having joined the C-suite astatine Google Cloud successful January, he’s orchestrating a monolithic wager connected AI’s 2nd wave.

It’s a communicative deSouza likes to archer successful numbers. In a speech with this exertion earlier this week, helium noted respective times that 9 retired of the apical 10 AI labs usage Google’s infrastructure. He besides said that astir each generative AI unicorns tally connected Google Cloud, that 60% of each gen AI startups worldwide person chosen Google arsenic their unreality provider, and that the institution has lined up $58 cardinal successful caller gross commitments implicit the adjacent 2 years, which represents much than treble its existent yearly tally rate.

“AI is resetting the unreality market, and Google Cloud is starring the way, particularly with startups,” helium said successful a soft-spoken tone, his understated transportation masking an ambitious strategy to location successful connected upstarts portion the biggest players are engaged striking lucrative but non-exclusive partnerships.

The Nvidia-OpenAI woody exemplifies the standard of consolidation sweeping AI infrastructure. Microsoft’s archetypal $1 cardinal OpenAI concern has grown to astir $14 billion, fundamentally reshaping the unreality market. Amazon followed with $8 cardinal successful Anthropic investments, securing heavy hardware customizations that fundamentally tailor AI grooming to enactment amended with Amazon’s infrastructure. Oracle has emerged arsenic a astonishment winner, too, landing a $30 billion unreality woody with OpenAI and past securing a jaw-dropping $300 billion five-year committedness starting successful 2027.

Even Meta, contempt gathering its ain infrastructure, signed a $10 cardinal deal with Google Cloud portion readying $600 cardinal successful U.S. infrastructure spending done 2028. The Trump administration’s $500 cardinal “Stargate” project, involving SoftBank, OpenAI and Oracle, adds different furniture to these interlocking partnerships.

These gigantic deals mightiness look threatening for Google, fixed the partnerships that companies similar OpenAI and Nvidia look to beryllium cementing elsewhere. In fact, it looks a batch similar Google is being chopped retired of immoderate frenzied dealmaking. 

The Google logo appears during a gathering betwixt Alphabet and Google CEO Sundar Pichai and Polish Prime Minister Donald Tusk astatine Google for Startups successful Warsaw, Poland, connected February 13, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)Image Credits:Klaudia Radecka/NurPhoto / Getty Images

But the firm behemoth isn’t precisely sitting connected its hands. Instead, Google Cloud is signing smaller companies similar Loveable and Windsurf — what deSouza calls the “next procreation of companies coming up”– arsenic “primary computing partners” without large upfront investments.

The attack reflects some accidental and necessity. In a marketplace wherever companies tin spell “from being a startup to being a multi-billion dollar institution successful a precise abbreviated play of time,” arsenic deSouza puts it, capturing aboriginal unicorns earlier they mature could beryllium much invaluable than warring implicit today’s giants.

The strategy extends beyond elemental lawsuit acquisition. Google offers AI startups $350,000 successful unreality credits, entree to its method teams, and go-to-market enactment done its marketplace. Google Cloud besides provides what deSouza describes arsenic a “no compromise” AI stack – from chips to models to applications – with an “open ethos” that gives customers prime astatine each layer.

“Companies emotion the information that they tin get entree to our AI stack, they tin get entree to our teams to recognize wherever our technologies are going,” deSouza said during our interview. “They besides emotion that they’re getting entree to endeavor people Google people infrastructure.”

This infrastructure vantage became much evident this period erstwhile reporting revealed Google’s behind-the-scenes maneuvering to grow its customized AI spot business. According to The Information, Google has struck deals to spot its tensor processing units (TPUs) successful different unreality providers’ information centers for the archetypal time, including an statement with London-based Fluidstack that includes up to $3.2 cardinal successful fiscal backing for a New York facility.

Competing straight with AI companies portion simultaneously providing them infrastructure requires finesse. Google Cloud provides TPU chips to OpenAI and hosts Anthropic’s Claude exemplary done its Vertex AI platform, adjacent arsenic its ain Gemini models vie head-to-head with both. (Google Cloud’s genitor company, Alphabet, besides owns a 14% involvement successful Anthropic, per New York Times tribunal documents obtained earlier this year, though erstwhile asked straight astir Google’s fiscal narration with Anthropic, deSouza calls the narration a “multi-layered partnership” past rapidly redirected to Google Cloud’s “model garden” – noting that customers tin entree assorted instauration models.)

But if Google is trying to beryllium Switzerland portion advancing its ain agenda, it has had plentifulness of practice. The attack has roots successful Google’s open-source contributions, from Kubernetes to the foundational “Attention is All You Need” insubstantial that enabled the transformer architecture underlying astir modern AI. More recently, Google published an open-source protocol called Agent-to-Agent (A2A) for inter-agent connection successful an effort to show its continued committedness to openness adjacent successful competitory areas.

“We person made the explicit prime implicit the years to beryllium unfastened astatine each furniture of the stack, and we cognize that this means companies tin perfectly instrumentality our exertion and usage it to physique a rival astatine the adjacent layer,” deSouza acknowledged. “That’s been happening for decades. That’s thing we are good with.”

Google Cloud’s courtship of startups comes astatine a peculiarly absorbing moment. Just this month, national justice Amit Mehta delivered a nuanced ruling successful the government’s five-year-old hunt monopoly case, attempting to curb Google’s dominance without hampering its AI ambitions.

While Google avoided the Justice Department’s astir terrible projected penalties, including the forced divestment of its Chrome browser, the ruling underscored regulatory concerns astir the institution leveraging its hunt monopoly to predominate AI. Critics are worried, understandably, that Google’s immense trove of hunt information provides an unfair vantage successful processing AI systems, and that the institution could deploy the aforesaid monopolistic tactics that secured its hunt dominance.

In conversation, deSouza is focused connected acold much affirmative outcomes. For example, helium says, “I deliberation we person an accidental to fundamentally recognize immoderate of the large diseases that contiguous we conscionable don’t person a bully knowing of,” deSouza said, outlining a imaginativeness wherever Google Cloud helps powerfulness probe into Alzheimer’s, Parkinson’s, and clime technologies. “We privation to enactment precise hard to marque definite that we are pioneering the technologies that volition alteration that work.”

Critics whitethorn not easy beryllium assuaged. By positioning itself arsenic an unfastened level that empowers alternatively than controls the adjacent procreation of AI companies, Google Cloud whitethorn beryllium showing regulators that it fosters contention alternatively than stifles it, each portion forging relationships with startups that mightiness assistance Google’s lawsuit if regulators ramp up pressure.

For our afloat speech with deSouza, cheque retired this week’s StrictlyVC Download podcast; a caller occurrence comes retired each Tuesday.