ChatGPT-maker OpenAI signs massive deal with Google amid fierce AI competition, it is...

In a surprising move, Open AI has collaborated with Google amid fierce competition between its ChatGPT and Gemini in the artificial intelligence sector. In order to meet its growing needs for computing capacity, Open AI plans to utilise Google’s cloud service, according to Reuters. Since the launch of ChatGPT in late 2022, the tech giant has been struggling with the increasing need for computing power. 

Open AI and Google have been under discussion for months before finalising the deal in May, said the sources close to Reuters. The move aims to minimise OpenAI's reliance on Microsoft, whose Azure Cloud infrastructure it had used for ChatGPT's exclusive Stargate data center project till January. The surprising step by Open AI marks its diversification of computing sources, beyond its major supporter Microsoft. It also highlights the massive computing demand to cater for training and deploying AI models for reshaping the competitive dynamics surrounding AI. 

On the other hand, OpenAI’s move favours Google’s cloud unit, as it comes at a time when OpenAI’s ChatGPT poses the biggest threat to Google’s dominant search business in years. The Google executives recently said that the AI race may not be winner-take-all.

Following the news, Alphabet’s stock was up 2.1% on Tuesday, while Microsoft shares dropped 0.6%. Scotiabank analysts called the development “somewhat surprising” in a note on Tuesday, underlining the growth opportunities for Google’s Cloud unit, while expressing caution regarding competition from ChatGPT. “The deal ... underscores the fact that the two are willing to overlook heavy competition between them to meet the massive computing demands. Ultimately, we view this as a big win for Google’s cloud unit, but ... there are continued worries that ChatGPT is becoming an incrementally larger threat to Google’s search dominance,” the analysts wrote as reported by Reuters. 

Earlier in 2025, OpenAI had also partnered with SoftBank and Oracle on the $500 billion Stargate project to strengthen its AI infrastructure in the US. In addition, it signed deals in billions with CoreWeave for more computing. Up next, OpenAI is reportedly planning to finalise the design of its first in-house chip. The deal will potentially reduce its reliance on external hardware providers.