Alphabet’s Google stock surged nearly 3% earlier in the day before retreating slightly, but the reason behind this increase is intriguing. According to a Reuters report, OpenAI, a leading artificial intelligence (AI) company, plans to use Alphabet’s Google cloud service to support its AI operations.
This partnership may seem surprising, given that OpenAI’s ChatGPT service competes with Google’s Gemini. However, it appears that the deal was finalized last month. The move is likely driven by two main reasons: to diversify OpenAI away from relying on Microsoft data farms and to fuel its rapid growth in AI services.
OpenAI will also partner with SoftBank and Oracle on Project Stargate for similar reasons. While this partnership may benefit OpenAI, it could also boost Google’s cloud unit, which generated $43 billion in sales last year.
Analysts have agreed that this is a significant win for Google Cloud, setting it up for even more growth in 2025.
Source: https://www.fool.com/investing/2025/06/10/why-alphabet-stock-just-popped