OpenAI has finalized a deal to use Google Cloud services to meet its soaring computing needs in a surprising move that highlights the shifting dynamics of the AI arms race.

The agreement, reached in May after months of negotiation, marks a rare collaboration between two of the biggest rivals in artificial intelligence: OpenAI, the maker of ChatGPT, and Alphabet’s Google, whose own DeepMind unit is racing to develop competing AI models.

Sources say the partnership will see Google supplying computing capacity to support OpenAI’s training and deployment of its large language models, supplementing infrastructure provided by Microsoft, OpenAI’s primary backer. Neither OpenAI, Google, nor Microsoft responded to requests for comment.

The deal is a major win for Google Cloud, which has been vying to attract more AI-focused customers in a hotly contested market. Analysts from Scotiabank called the development “somewhat surprising,” noting that the two companies are setting aside their rivalry to address the immense computational demands of cutting-edge AI development.

OpenAI’s decision to diversify its infrastructure providers comes as its annualized revenue run rate surged to \$10 billion as of June, fueled by growing adoption of ChatGPT and other products. The company has also entered billion-dollar partnerships with CoreWeave and Oracle, and is working on its own chip design to reduce dependency on external hardware providers.

The deal is likely to further strain OpenAI’s relationship with Microsoft, which until January had been its exclusive cloud partner. The two companies are reportedly renegotiating the terms of Microsoft’s multibillion-dollar investment, including the structure of its future equity stake.

For Google, the OpenAI partnership showcases the strength of its custom tensor processing units, which were once limited to internal use but have recently powered deals with Apple, Anthropic, and other AI firms. The tech giant is leveraging this technology to grow its $43 billion cloud business and compete against Microsoft Azure and Amazon Web Services for AI infrastructure dominance.

Still, the collaboration poses internal challenges. With DeepMind directly competing against OpenAI and chip supply already under strain, Alphabet CEO Sundar Pichai must now navigate how to allocate resources between external clients and Google’s own AI development.

Despite ChatGPT’s threat to Google’s search business—analysts say it could chip away at the company’s dominant market share—Google executives maintain that the AI race will not be winner-takes-all. The deal signals that even fierce competitors may find common ground when the demand for computing power outweighs traditional rivalries.