Alphabet CEO Sundar Pichai commented on Google Cloud’s recently-announced partnership with OpenAI during Google’s second quarter earnings call on Wednesday. OpenAI recently included Google among its suppliers, according to an updated list. This deal was finalized in May after months of discussion, according to Reuters.
“With respect to OpenAI, look, we are very excited to be partnering with them on Google Cloud,” Pichai said. “Google Cloud is an open platform, and we have a strong history of supporting great companies, startups, AI labs, etc. So super excited about our partnership there on the cloud side, and we look forward to investing more in that relationship and growing that.”
The partnership is especially interesting since OpenAI’s ChatGPT has emerged as a major competitor for Google Search. This deal can potentially lead to OpenAI using Google’s Cloud infrastructure to upend the company’s core Search product.
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Google Cloud’s revenue has gone up in the second quarter of 2025 to $13.6 billion from $10.3 billion in the same quarter last year. Google attributes much of this growth to the Google Cloud Platform and other products it offers to AI companies. Google Cloud is still a small business relative to Google Search, but it seems to be growing.
Google executives also said during the earnings call that the company would spend $10 billion more this year than it previously expected due to the growing demand for cloud services which created a backlog. This comes amid a surge in demand for cloud services across the tech industry as AI increases in popularity. Companies are now doubling down on infrastructure to keep pace with demand and are planning multi‑year buildouts of data centers.
Google reported that cloud revenues increased by 32% to $13.6 billion during the second quarter. Alphabet finance chief Anat Ashkenazi said during the company’s post-earnings conference call that the demand for the company’s cloud services is so high it now amounts to a $106 billion backlog. “It’s a tight supply environment,” she said.
The plans to increase spending initially caused concern for investors, and Alphabet stocks fell during Wednesday’s extended trading despite the financial gains that appear to come from investment in AI. However, this reversed course after Alphabet executives elaborated on Google’s AI progress and made other reassuring remarks during a Wednesday conference call, and the stock price rose by more than 2% in extended trading.
Google’s increasing investment in AI comes at a time of intensifying competition with different companies like OpenAI and Perplexity. Besides the threat of competition, a federal judge who declared Google’s search engine to be an illegal monopoly is now considering a range of countermeasures that include requiring the sale of its popular Chrome browser.