Meta signs over $10 billion cloud deal with Google, source says

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(Reuters) -Google has struck a six-year cloud computing deal with Meta Platforms worth more than $10 billion, a source familiar with the matter told Reuters on Thursday, the search giant’s second big agreement recently after one with OpenAI.

Under the agreement, Meta will use Google Cloud’s servers, storage, networking and other services, the source, who asked not to be named because the discussions are confidential, said.

Google and Meta did not immediately respond to requests for comment.

The deal was first reported by the Information.

The news comes after Meta CEO Mark Zuckerberg’s comments in July that the company would spend hundreds of billions of dollars to build several massive AI data centers.

The company raised the bottom end of its annual capital expenditures forecast by $2 billion, to a range of $66 billion to $72 billion last month.

Meta is seeking outside partners to help it fund the massive infrastructure needed to power AI by offloading $2 billion in data center assets, the company disclosed in a filing earlier this month.

In June, Reuters reported that OpenAI was planning to add Alphabet’s Google Cloud service to meet its growing needs for computing capacity, a surprising collaboration between two prominent competitors in the artificial intelligence sector.

Amid this flurry of deals, Google parent’s cloud-computing unit delivered an almost 32% jump in second-quarter revenue in July, which surpassed expectations.

(Reporting by Sayantani Ghosh in San Francisco and Angela Christy in Bengaluru; additional reporting by Yazhini MV and Mrinmay Dey in Bengaluru; editing by Alan Barona)