Focus on the diversification of AI computing power! OpenAI and Alphabet Inc. Class C (GOOGL.US) reached a cloud service agreement.

According to reports, OpenAI plans to introduce Alphabet Inc. Class C (GOOGL.US) cloud services to meet its growing computational power needs. It is reported that the cooperation agreement has been discussed for several months and was finally finalized in May this year. For a long time, Microsoft Corporation (MSFT.US) has been a major supporter of OpenAI, and the two have had close cooperation on multiple projects. Prior to January this year, Microsoft Corporation had been the exclusive cloud services provider for OpenAI. Therefore, this cooperation between OpenAI and Alphabet Inc. Class C is surprising, as OpenAI and Alphabet Inc. Class C have long been direct competitors in the field of artificial intelligence (AI). This collaboration signifies a strategic shift in OpenAI's access to computational resources, demonstrating its urgent need for diversified sources of computational power. Some analysts believe that the cooperation with Alphabet Inc. Class C will provide additional computational support to OpenAI, helping it further advance the training and deployment of AI models. With the continuous development of AI technology, the demand for computational power is growing exponentially, and a single source of computational power may not be able to meet its long-term development needs. This cooperation will make OpenAI more flexible in ensuring computational power and help maintain its leading position in the field of AI. In addition, for Alphabet Inc. Class C cloud services, cooperation with OpenAI will bring new business growth opportunities. However, Alphabet Inc. Class C also faces certain challenges, as it needs to balance providing external cloud services while managing its own AI research and development work, ensuring that cooperation does not compromise core technology or impact the progress of its own AI projects. It is worth mentioning that a recent research report by Morgan Stanley analyst Brian Nowak and his team suggests that the cooperation agreement between Alphabet Inc. Class C and OpenAI is significant. On one hand, this is expected to accelerate the growth of Alphabet Inc. Class C's cloud business, which is currently undervalued at around 18 times expected 2026 earnings. On the other hand, this sends a signal of confidence from Alphabet Inc. Class C in its long-term search position. The report points out that if Alphabet Inc. Class C truly feared a threat to its search business, it would not be willing to provide crucial computational power to potential competitors. This indicates that Alphabet Inc. Class C understands its business health data better than anyone else, and is confident in its user base, data assets, and innovation pace.