Meta said that it expects to spend up to $118bn this year as it ramps up AI-related investments.
Meta will be paying more than $10bn to use Google’s cloud services for six years, news outlets reported yesterday (21 August). Sources told outlets that the Facebook owner’s deal with Google Cloud is primarily around artificial intelligence (AI) infrastructure.
Meta has been on a spending spree, investing heavily in AI infrastructure while poaching key talent from rival AI companies as it builds its new Superintelligence Labs. The company said it expects to spend up to $118bn this year. It signalled that its AI-related expenses would increase into 2026.
While for cloud providers, the AI boom has been greatly beneficial for sales. According to Google, 90pc of generative AI unicorns use its cloud services. Its second quarter earnings showed Cloud revenue up by 32pc year on year, reaching more than $13.6bn.
Google is competing with the likes of Microsoft, whose Intelligent Cloud unit, which houses Azure, earned nearly $30bn according to its latest results. While Amazon Web Services’ revenue for the second quarter totalled around $30bn and Oracle Cloud services and license support revenue was up 14pc to $11.7bn in the quarter past.
Google’s cloud unit has garnered much attention in recent months as a crucial growth target for the company, especially as antitrust actions threaten the company’s search-based ad empire. While Google seems intent on keeping Chrome, companies have already offered to purchase the browser, with proposals coming in from Perplexity and OpenAI.
Google cloud suffered a major outage in June, which affected a range of its services such as Gmail and Google Drive, as well as prominent customers including OpenAI, Cloudflare, Shopify and Spotify. It took the company more than seven hours to fully resolve the outage.
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