Meta and Google Strike $10 Billion Cloud Deal to Fuel AI Arms Race

TradingKey - Tech giants Meta and Google have reached a landmark cloud computing services agreement valued at over $10 billion with a six-year term — the first major collaboration between the long-standing rivals in the cloud sector.

Under the agreement, Meta will fully adopt Google Cloud’s servers, storage, networking, and other core services to support its rapidly expanding artificial intelligence infrastructure.

Meta CEO Mark Zuckerberg publicly stated in July that the company plans to invest hundreds of billions of dollars in building multiple large-scale AI data centers to train next-generation AI models. The company has raised its 2025 capital expenditure forecast to $66–72 billion, with the majority allocated to data center construction. For instance, Meta is investing $29 billion in an advanced Louisiana data center focused on boosting GPU capacity and high-energy facilities to support Llama-series large language model development.

Analysts predict that given the rapid advancement of cutting-edge AI models in search, coding agents, real-time summarization, and language translation, Meta may prioritize enhancing Llama’s inference capabilities over merely scaling training capacity.

For Google Cloud, this deal reinforces its position as a leading global infrastructure provider. Following its recent cloud contract win from OpenAI — which had previously relied heavily on Microsoft Azure — the Meta partnership further demonstrates its competitive strength.

Google has simultaneously deployed aggressive pricing tactics to undercut rivals, such as offering its Gemini Government Edition at just $0.47 per organization annually — a move significantly eroding competitive advantages for Amazon AWS and Microsoft Azure.

Bloomberg Intelligence analysts Mandeep Singh and Robert Biggar noted in a recent report that the Meta-Google agreement "demonstrates Google Cloud’s superior token pricing advantage compared to other hyperscale cloud providers."

Meta shares declined 1.15% Thursday to $739.10, while Google (GOOGL) edged up 0.22% to $199.75.

Wall Street remains optimistic about both companies’ long-term prospects, with TradingKey data showing analyst target prices of $848.956 for Meta (13.54% upside potential) and $217.15 for Google (8.95% upside potential) from current levels.