It Isn’t Your Imagination; Google Cloud Is Flooding The Zone

The $100 billion business betwixt Nvidia and OpenAI, announced Monday, represents – for now – nan latest mega-deal reshaping nan AI infrastructure landscape. The statement involves non-voting shares tied to monolithic spot purchases and capable computing powerfulness for much than 5 cardinal U.S. households, deepening nan communal dependence betwixt 2 of AI’s astir powerful players.

Meanwhile, Google Cloud is placing a different stake entirely. While nan industry’s biggest players cement ever-tighter partnerships, Google is hellbent connected capturing nan adjacent procreation of AI companies earlier they go excessively large to court.

Francis deSouza, its COO, has seen nan AI gyration from aggregate vantage points. As nan erstwhile CEO of genomics elephantine Illumina, he watched instrumentality learning toggle shape supplier discovery. As co-founder of a two-year-old AI alignment startup, Synth Labs, he has grappled pinch nan information challenges of progressively powerful models. Now, having joined nan C-suite astatine Google Cloud successful January, he’s orchestrating a monolithic wager connected AI’s 2nd wave.

It’s a communicative deSouza likes to show successful numbers. In a speech pinch this editor earlier this week, he noted respective times that 9 retired of nan apical 10 AI labs usage Google’s infrastructure. He besides said that astir each generative AI unicorns tally connected Google Cloud, that 60% of each gen AI startups worldwide person chosen Google arsenic their unreality provider, and that nan institution has lined up $58 cardinal successful caller gross commitments complete nan adjacent 2 years, which represents much than double its existent yearly tally rate.

“AI is resetting nan unreality market, and Google Cloud is starring nan way, particularly pinch startups,” he said successful a soft-spoken tone, his understated transportation masking an eager strategy to location successful connected upstarts while nan biggest players are engaged striking lucrative but non-exclusive partnerships.

The Nvidia-OpenAI woody exemplifies nan standard of consolidation sweeping AI infrastructure. Microsoft’s original $1 cardinal OpenAI finance has grown to astir $14 billion, fundamentally reshaping nan unreality market. Amazon followed pinch $8 cardinal successful Anthropic investments, securing heavy hardware customizations that fundamentally tailor AI training to activity amended pinch Amazon’s infrastructure. Oracle has emerged arsenic a astonishment winner, too, landing a $30 billion unreality woody pinch OpenAI and past securing a jaw-dropping $300 billion five-year committedness starting successful 2027.

Even Meta, contempt building its ain infrastructure, signed a $10 cardinal deal pinch Google Cloud while readying $600 cardinal successful U.S. infrastructure spending done 2028. The Trump administration’s $500 cardinal “Stargate” project, involving SoftBank, OpenAI and Oracle, adds different furniture to these interlocking partnerships.

These gigantic deals mightiness look threatening for Google, fixed nan partnerships that companies for illustration OpenAI and Nvidia look to beryllium cementing elsewhere. In fact, it looks a batch for illustration Google is being trim retired of immoderate frenzied dealmaking. 

The Google logo appears during a gathering betwixt Alphabet and Google CEO Sundar Pichai and Polish Prime Minister Donald Tusk astatine Google for Startups successful Warsaw, Poland, connected February 13, 2025. (Photo by Klaudia Radecka/NurPhoto via Getty Images)Image Credits:Klaudia Radecka/NurPhoto / Getty Images

But nan firm behemoth isn’t precisely sitting connected its hands. Instead, Google Cloud is signing smaller companies for illustration Loveable and Windsurf — what deSouza calls nan “next procreation of companies coming up”– arsenic “primary computing partners” without awesome upfront investments.

The attack reflects some opportunity and necessity. In a marketplace wherever companies tin spell “from being a startup to being a multi-billion dollar institution successful a very short play of time,” arsenic deSouza puts it, capturing early unicorns earlier they mature could beryllium much valuable than fighting complete today’s giants.

The strategy extends beyond elemental customer acquisition. Google offers AI startups $350,000 successful unreality credits, entree to its method teams, and go-to-market support done its marketplace. Google Cloud besides provides what deSouza describes arsenic a “no compromise” AI stack – from chips to models to applications – pinch an “open ethos” that gives customers prime astatine each layer.

“Companies emotion nan truth that they tin get entree to our AI stack, they tin get entree to our teams to understand wherever our technologies are going,” deSouza said during our interview. “They besides emotion that they’re getting entree to endeavor people Google people infrastructure.”

This infrastructure advantage became much evident this period erstwhile reporting revealed Google’s behind-the-scenes maneuvering to grow its civilization AI spot business. According to The Information, Google has struck deals to spot its tensor processing units (TPUs) successful different unreality providers’ information centers for nan first time, including an statement pinch London-based Fluidstack that includes up to $3.2 cardinal successful financial backing for a New York facility.

Competing straight pinch AI companies while simultaneously providing them infrastructure requires finesse. Google Cloud provides TPU chips to OpenAI and hosts Anthropic’s Claude exemplary done its Vertex AI platform, moreover arsenic its ain Gemini models compete head-to-head pinch both. (Google Cloud’s genitor company, Alphabet, besides owns a 14% liking successful Anthropic, per New York Times tribunal documents obtained earlier this year, though erstwhile asked straight astir Google’s financial narration pinch Anthropic, deSouza calls nan narration a “multi-layered partnership” past quickly redirected to Google Cloud’s “model garden” – noting that customers tin entree various instauration models.)

But if Google is trying to beryllium Switzerland while advancing its ain agenda, it has had plentifulness of practice. The attack has roots successful Google’s open-source contributions, from Kubernetes to nan foundational “Attention is All You Need” insubstantial that enabled nan transformer architecture underlying astir modern AI. More recently, Google published an open-source protocol called Agent-to-Agent (A2A) for inter-agent connection successful an effort to show its continued committedness to openness moreover successful competitory areas.

“We person made nan definitive prime complete nan years to beryllium unfastened astatine each furniture of nan stack, and we cognize that this intends companies tin perfectly return our exertion and usage it to build a competitor astatine nan adjacent layer,” deSouza acknowledged. “That’s been happening for decades. That’s thing we are okay with.”

Google Cloud’s courtship of startups comes astatine a peculiarly absorbing moment. Just this month, national judge Amit Mehta delivered a nuanced ruling successful nan government’s five-year-old hunt monopoly case, attempting to curb Google’s power without hampering its AI ambitions.

While Google avoided nan Justice Department’s astir terrible projected penalties, including nan forced divestment of its Chrome browser, nan ruling underscored regulatory concerns astir nan institution leveraging its hunt monopoly to predominate AI. Critics are worried, understandably, that Google’s immense trove of hunt information provides an unfair advantage successful processing AI systems, and that nan institution could deploy nan aforesaid monopolistic strategies that secured its hunt dominance.

In conversation, deSouza is focused connected acold much affirmative outcomes. For example, he says, “I deliberation we person an opportunity to fundamentally understand immoderate of nan awesome diseases that coming we conscionable don’t person a bully knowing of,” deSouza said, outlining a imagination wherever Google Cloud helps powerfulness investigation into Alzheimer’s, Parkinson’s, and ambiance technologies. “We want to activity very difficult to make judge that we are pioneering nan technologies that will alteration that work.”

Critics whitethorn not easy beryllium assuaged. By positioning itself arsenic an unfastened level that empowers alternatively than controls nan adjacent procreation of AI companies, Google Cloud whitethorn beryllium showing regulators that it fosters title alternatively than stifles it, each while forging relationships pinch startups that mightiness thief Google’s lawsuit if regulators ramp up pressure.

For our afloat speech pinch deSouza, cheque retired this week’s StrictlyVC Download podcast; a caller section comes retired each Tuesday.