Google has struck a cloud computing deal with Meta worth at least US$10 billion (A$15.57 billion), according to sources close to the matter.
The parent company of Instagram and Facebook will pay a minimum of $10 billion over six years to use Google Cloud’s servers and storage as it aims to compete in the AI race.
This follows Meta CEO commenting in July that the company would spend hundreds of billions of dollars to build several massive AI data centres. The company revealed in its earnings report last month that it expects total expenses for 2025 to come to US$114 billion to US$118 billion.
Meta is seeking outside partners to help fund this infrastructure needed to power AI by offloading US$2 billion in data centre assets.
It also comes as Google is aiming to land big cloud contracts to chase larger rivals like Amazon Web Services and Microsoft Azure in cloud infrastructure. Earlier this year, Google won cloud business from OpenAI.
According to Alphabet, the Google cloud unit that contains productivity software subscriptions and infrastructure generated US$2.83 billion in operating income on US$13.6 billion in revenue during the second quarter. Revenue growth of 32% outpaced the expansion of 13.8% for the company as a whole.
The deal was first reported by The Information and marks the first major computing deal between Meta and Google.
