Meta plans to spend over $10 billion on Google’s cloud, a rare partnership between ad rivals aimed at securing AI computing power.
Two people familiar with the deal asked not to be identified because the details are confidential The Information reported.
The contract lasts six years. The move fits Google’s push for large cloud wins as it chases Amazon Web Services and Microsoft Azure. Earlier this year, Google also picked up work from OpenAI, which had leaned heavily on Microsoft’s Azure.
As hightlighted by Cryptopolitan earlier, Alphabet’s Google Cloud generated $2.83 billion in operating income on $13.6 billion in second-quarter revenue. Revenue rose 32%, faster than the company’s total growth of 13.8%.
AI infrastructure at the core of the Meta-Google deal
One person said the deal is focused on artificial intelligence infrastructure.
In its report last month, Meta forecast 2025 total expenses of $114 billion to $118 billion. It is pouring money into AI hardware and staff, upgrading its Llama models and putting AI into many of its apps.
Even as the two compete in digital ads, Meta is trying to secure as much computing power as possible. It operates its own data centers and has agreements to use cloud services from Amazon and Microsoft.
Meta Platforms is also seeking outside partners to help pay for the large data center needed for AI.
A filing said the company plans to sell $2 billion of data center assets as part of that plan. The approach mirrors a wider change at big tech companies as the cost of building and running generative AI data centers climbs.
“We’re exploring ways to work with financial partners to co-develop data centers,” Chief Financial Officer Susan Li said on a post-earnings call on Wednesday.
Meta is shifting how it funds its tech expansion
While Meta still expects to fund much of its capital spending internally, some projects could draw “significant external financing” and provide flexibility if needs change over time, she said.
In its quarterly filing, Meta said that in June it approved a plan to dispose of some data center assets and reclassified $2.04 billion of land and construction-in-progress as “held-for-sale.” The assets are slated to be contributed to a third party within the next twelve months to co-develop data centers.
Meta did not record a loss related to the reclassification, which measures the assets at the lower of carrying amount or fair value minus costs to sell. As of June 30, total held-for-sale assets were $3.26 billion, the filing said.
CEO Mark Zuckerberg has laid out plans to invest hundreds of billions of dollars into building AI data center “superclusters” to pursue superintelligence. “Just one of these covers a significant part of the footprint of Manhattan,” he said.
The company said ad sales topped expectations, helped by AI tools that improve targeting and content delivery, and said those gains are helping offset higher infrastructure costs from its long-term AI plans.
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Source: https://www.cryptopolitan.com/meta-picks-longtime-rival-google-in-10b-cloud-deal/
