Meta Strikes a Major Deal for Cloud Services
In a bold move to enhance its artificial intelligence (AI) capabilities, Meta has announced a massive $10 billion deal with Google Cloud that spans six years. This information came to light through sources cited by CNBC and Bloomberg.
Zuckerberg’s Vision for AI Growth
The CEO of Meta, Mark Zuckerberg, is pushing for significant advancements in AI technology within the company. Recent efforts include updates to their Llama model and the introduction of a dedicated Meta AI app. Notably, Meta has also expanded its workforce for AI by bringing on board over 50 new researchers and engineers.
Financial Commitment and Future Prospects
Zuckerberg has emphasized that developing AI is a top priority for Meta, vowing to invest billions into this initiative. Their recent earnings report from the second quarter showed an adjustment in their 2025 capital expenditure forecast, raising the lower limit from $64 billion to $66 billion while holding the upper limit steady at $72 billion.
Significance of the Google Collaboration
This major agreement represents the largest partnership deal between Meta and Google to date. Currently, Meta runs more than 24 data centers and is in the process of establishing new facilities. For Google Cloud, this deal is significant as it seeks to solidify its position in the cloud services market, which is currently led by Amazon Web Services and Microsoft Azure.
Market Reactions
Following the announcement of this deal, shares of Alphabet, Google’s parent company, saw a rise of 0.4% in after-hours trading.
Previous Collaborations Yielding New Opportunities
As noted in a Bloomberg report, this will mark the first instance of Google Cloud serving as a cloud vendor for Meta, although both companies have engaged in smaller collaborations in the past. Earlier this year, Google Cloud announced it would offer Meta’s open-source AI model, Llama, to developers via Vertex AI.
Market Sentiment on Stocktwits
As for market sentiment, both Meta and Alphabet have been holding a ‘bearish’ outlook on Stocktwits for the last two weeks, although their stocks have appreciated by 26.3% and 5.5%, respectively, since the start of the year.
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