OpenAI and Alphabet Inc (GOOGL) to Collaborate to Meet AI Computing Needs

Alphabet Inc. (NASDAQ:GOOGL) is one of the 12 Best Stocks to Buy and Hold for the Long Term. On June 10, Reuters reported that OpenAI has indicated its plans to add Alphabet Inc. (NASDAQ:GOOGL)’s cloud services to meet its growing demand for computing needs. This marks a notable advancement as both the company’s are seen as competitors in the AI industry.

As per Reuters, the deal was in consideration for months and is said to have been finalized in May. This highlights the massive nature of computing needs required to train and deploy AI models. On the other hand, analysts are seeing this as a major win for Alphabet Inc. (NASDAQ:GOOGL) which will now be supplying computing capacity to OpenAI’s existing infrastructure.

Moreover, Scotiabank analysts also took note of this development calling it a somewhat surprising advancement. The analyst acknowledged the deal to be a win for Google Cloud Unit. They highlighted that the deal underscores that both companies are looking beyond competition to address the growing demand for computing needs. However, the analysts at Scotiabank also expressed caution for Alphabet Inc. (NASDAQ:GOOGL) as ChatGPT is becoming a threat to the company’s search dominance.

While we acknowledge the potential of GOOGL as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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