Meta and Google have struck a major AI deal for the first time
The agreement with Google will allow Meta to quickly provide its "superintelligence" team with computing power
Meta Platforms has agreed with Google to acquire cloud services for at least $10 billion, The Information and Bloomberg reported, citing sources. The deal is part of the social networking giant's large-scale investments in artificial intelligence and the first major partnership with Google in cloud computing.
Details
The parent company of Facebook and Instagram will pay a minimum of $10 billion over six years to use Google Cloud servers and data storage, The Information was the first to report. According to Bloomberg's sources, Meta's goal is to rapidly increase computing capacity amid a competitive race to deploy AI tools for users.
This is the first major cloud services deal between Meta and Google: Google Cloud has partnered with Meta before, but never as an official cloud infrastructure provider, Bloomberg notes. Google ranks third in this market, behind Amazon Web Services and Microsoft Azure.
What the analysts are saying
The multi-year agreement with Meta has proven: Google's strategy of offering low prices in the market for artificial intelligence services is working, said Bloomberg analysts Mandeep Singh and Robert Biggar. In turn, Meta will now be able to focus on making its Llama neural network smarter, they added.
Context
Meta CEO Mark Zuckerberg has previously promised to spend hundreds of billions of dollars on AI and the infrastructure required for it. He is poaching top talent from OpenAI, Google, and Apple and is looking to maximize computing power as quickly as possible. While Meta has more than two dozen of its own data centers and is actively building new ones, including a more than 37-hectare facility in Louisiana, some of them won't be operational for several years, Bloomberg notes.
What's going on with the stock
Alphabet shares are up 1% on the premarket in New York, while Meta securities are adding 0.2%. Since the beginning of 2025, they have grown by 5.5% and 26.2%, respectively.
Wall Street has no doubt that both stocks will bring long-term investors returns above the market average - according to FactSet, the consensus ratings of both companies in recent months are kept at the level of Buy. The average target prices calculated by the service assume growth of Alphabet's quotations by 10%, Meta - by 17% in the coming year.
This article was AI-translated and verified by a human editor
