Google CEO Sundar Pichai expressed enthusiasm about supplying OpenAI, Google’s largest competitor in AI, with cloud computing resources to train and serve its AI models. This partnership was discussed during Google’s second-quarter earnings call. Pichai highlighted Google Cloud’s role as an open platform, emphasizing its history of supporting startups, AI labs, and major companies. He stated the company looks forward to growing its relationship with OpenAI through cloud investments.
The announcement followed questions from analysts about AI’s impact on Google’s core search business and its decision to increase capital expenditures by $10 billion this year to stay competitive in AI. Since ChatGPT’s launch two and a half years ago, Google has intensified its focus on developing leading AI models to rival OpenAI.
While ChatGPT poses a significant threat to Google Search, the OpenAI deal represents a major win for Google Cloud. The partnership presents a delicate dynamic, as OpenAI could leverage Google’s cloud infrastructure and chips to challenge Google’s search dominance. Earlier this month, OpenAI quietly added Google Cloud to its list of cloud computing suppliers, alongside Microsoft and Oracle. Reports in June had already suggested OpenAI was considering Google Cloud for additional computational power.
Google Cloud’s revenue surged to $13.6 billion in the second quarter of 2025, up from $10.3 billion the previous year. A substantial portion of this growth is attributed to services provided to AI companies. Though still smaller than Google Search, Google Cloud is expanding rapidly in the AI era. Other prominent AI labs, including Anthropic, Safe Superintelligence, and World Labs, also rely on Google Cloud. Pichai credited the company’s success in securing these deals to its ample supply of Nvidia GPUs and in-house TPU chips.
On the product side, Google’s AI initiatives are performing better than anticipated. Its AI chatbot, Gemini, now boasts 450 million monthly active users, while AI Overviews reaches 2 billion. However, the financial impact of these products and their effect on Google Search queries remain unclear.
Despite Pichai’s public excitement, the partnership with OpenAI carries inherent risks. OpenAI represents the most significant threat Google Search has ever faced. The arrangement echoes Google’s early deal with Yahoo, which helped Google eventually surpass Yahoo as the internet’s primary gateway. Whether OpenAI’s relationship with Google will endure is yet to be seen.