Google Chief Executive Officer Sundar Pichai on Wednesday expressed enthusiasm over a new cloud computing partnership with OpenAI — the creator of ChatGPT and arguably Google’s fiercest competitor in the field of artificial intelligence — calling the collaboration a reflection of Google Cloud’s open platform strategy.
Speaking during Alphabet’s second-quarter earnings call, Pichai said, “We are very excited to be partnering with [OpenAI] on Google Cloud. Google Cloud is an open platform, and we have a strong history of supporting great companies, startups, AI labs, etc. So super excited about our partnership there on the cloud side, and we look forward to investing more in that relationship and growing that.”
The deal comes amid an intensifying AI arms race between Google and OpenAI, as the former pours billions into developing its own advanced models and services to compete in a market reshaped by ChatGPT’s release over two years ago. Industry observers have termed the arrangement “strategically precarious,” with OpenAI now a major customer on Google’s infrastructure while simultaneously threatening the very foundation of Google’s search business.
During the earnings call, analysts raised concerns about how AI innovations — particularly those driven by rivals — could impact Google’s flagship Search division. Alphabet is expected to spend an additional $10 billion this year on capital expenditures, much of it directed toward AI development and infrastructure.
Despite these concerns, the company appears keen to leverage its cloud unit as a neutral platform for cutting-edge AI development. OpenAI recently confirmed Google Cloud as one of its cloud service providers, alongside Microsoft and Oracle. The move is seen as an effort to expand computing capacity amid constraints linked to GPU shortages — a persistent challenge even for well-funded AI labs.
Google Cloud, though still a relatively smaller revenue stream compared to the company’s advertising-driven Search business, posted robust results in Q2 2025. Revenue surged to $13.6 billion, up from $10.3 billion in the same quarter last year. Much of that growth, executives say, is attributable to partnerships with AI labs seeking access to Google’s high-performance computing chips, including Nvidia GPUs and in-house Tensor Processing Units (TPUs).
Apart from OpenAI, Google Cloud has secured deals with several prominent AI research entities, including Anthropic, Safe Superintelligence — led by OpenAI co-founder Ilya Sutskever — and Fei-Fei Li’s World Labs.
“We’ve seen strong momentum in the cloud space, particularly among AI-first customers who value our technical infrastructure,” Pichai added.
However, the long-term implications of such partnerships remain uncertain. Analysts have drawn historical parallels to Google’s early days, when it rose to dominance by licensing its search technology to Yahoo — only to later eclipse its partner.
While the Gemini AI chatbot and AI Overviews platform have shown promising adoption — reaching 450 million and 2 billion monthly active users respectively — the monetisation strategy around these products remains unclear. It is also not yet evident how much they are cannibalising traditional Search queries.
Industry analysts caution that despite Pichai’s upbeat tone, the alliance with OpenAI may serve as a double-edged sword. By enabling OpenAI with the computing power it needs, Google could inadvertently accelerate a competitor’s efforts to disrupt the search industry.
