Meta secured a six-year agreement to purchase large-scale computing capacity from Google Cloud while gradually reducing its own data center capacity. Meta sold $2 billion in data center infrastructure to free capital for investments and intends to continue building its own AI infrastructure. Meta reorganized its AI division into Meta Superintelligence Labs with four specialized teams, recruited talent from competitors, then announced a hiring freeze. CEO Mark Zuckerberg raised annual capital expenditure forecasts to $66–72 billion and seeks external partners to finance AI infrastructure. Google Cloud reported 32 percent cloud growth and gains market-share momentum amid competition with AWS and Microsoft's Azure.
For the next six years, Meta will be able to turn to Google Cloud for its computing needs. After gradually reducing its own data center capacity, CEO Mark Zuckerberg's company is still aiming to build its own AI infrastructure. Meta recently sold $2 billion worth of data center infrastructure. This was necessary to make room for other investments. Now we can see what that financial muscle looks like: purchasing an enormous amount of capacity from Google Cloud.
Both Meta and Google are investing heavily in the supposed race to AGI (Artificial General Intelligence). Meta recently reorganized its AI division under the new umbrella Meta Superintelligence Labs, consisting of four specialized teams. It has been hunting for talent at competitors, from Google to OpenAI, but has now completed this process. At least, that is how it appears: Meta has announced a hiring freeze.
For Google, the mega deal is another major victory in the battle for market share in the public cloud market. The company achieved 32 percent growth for its cloud division in the second quarter, exceeding expectations. It has been number three behind AWS and Azure since the expansion of GCP more than a decade ago. The gap is wide: Microsoft's cloud is already about twice as large in terms of market share at 24 percent.
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