Meta will pay Google $10 billion over six years for access to Google Cloud's storage, server, networking services and other products. The agreement supplements Meta's existing use of AWS and Azure and reflects large, growing cloud infrastructure needs driven by AI initiatives. The payment provides significant revenue and strategic validation for Alphabet's Google Cloud while allowing Meta to scale AI workloads. The deal pairs two major competitors in digital advertising even as both companies shift revenue mixes and diversify away from ad dependence. The arrangement could act as a catalyst for investor confidence in both companies' AI and cloud trajectories.
Considering the $10 billion size of the deal, one has to assume it is critical, particularly to Alphabet. Still, considering the state of the artificial intelligence (AI) stock, it could serve as a much-needed catalyst for the company's investors. Here's why. Terms of the partnership Under the terms of the deal, Meta will pay Google $10 billion over six years. In exchange, it will receive access to Google Cloud's storage, server, and networking services, along with other products.
Meta has previously relied on Amazon's Amazon Web Services (AWS) and Microsoft's Azure for such services. The deal does not necessarily mean it will deal less with these companies. More likely, it speaks to Meta's insatiable demand for cloud infrastructure as it seeks to become a major player in the AI space. Additionally, Meta and Alphabet are each other's largest competitors in the digital advertising market.
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