Google Cloud’s Newest Customer? Facebook. And the Deal Is Massive

In one of the biggest under-the-radar tech deals of the year, Meta Platforms has reportedly signed a staggering $10 billion cloud computing contract with its long-time rival, Google.

According to a source familiar with the agreement, the six-year deal will see Meta—the parent company of Facebook, Instagram, and WhatsApp—use Google Cloud’s servers, networking, and storage to power its vast operations.

The news, which was first reported by The Information, hasn’t been officially announced. When asked for a statement, both Meta and Google declined to comment.

So, why would Meta make such a huge deal with a competitor? It all comes down to Artificial Intelligence.

This move perfectly aligns with recent statements from Meta CEO Mark Zuckerberg, who has spoken about investing hundreds of billions of dollars to build massive AI data centers. The company recently increased its capital spending forecast for 2024 to between $66 billion and $72 billion. Meta is also in the process of offloading $2 billion in older data center assets to make way for new, AI-focused infrastructure. This deal appears to be a major part of that strategy, allowing Meta to expand its AI capabilities using Google’s powerful, ready-made platform.

For Google, this is a massive win. Landing a client the size of Meta is a huge boost for its cloud division and solidifies its position as a go-to provider for demanding AI workloads. This comes on the heels of another surprise deal to provide cloud infrastructure for AI rival OpenAI. With Google Cloud’s revenue already up nearly 32% in the last quarter, this new $10 billion partnership is set to supercharge its growth even further.