| HN Mirror

>> Rumor is that GCP was happily selling compute to competitors. After all, under the hood, Google is closer to a federation than a corporation. The state of GCP doesn't care about the state of Gemini.

> It’s not a rumor - there are many public announcements about $B deals around compute for other Ai companies

The last time I read a public announcement, the commentary I read was this is because Anthorpic doesn't want to run out of cash or capacity before a funding round / IPO so they gave Google some equity and in return Google gave it some compute resources? You could reframe it as Google is buying into Anthorpic — which is how Claude tends to frame it as but the end result is the same. Equity for spare capacity.

You could even argue that at a hyperscaler like Google's scale — all capacity is spare capacity and no capacity is spare capacity at the same time. GCP seems to have deals with Anthorpic, OpenAI, Meta, Apple, Healthcare companies, Banks, LG(?), Best Buy(?) so in my mind Google (and all AI vendors) are hyping up AI to drive up interest and building up as fast as they can to capture that interest and convert it into cold, hard cash. It honestly feels like this is out of my mental capacity though because these AI vendors had the cold hard cash that they spent on these data centers that we don't even know might become obsolete within a decade(?) but I guess meanwhile they could make beaucoup bucks. There is also the idea that they had to be seen as conspicuously spending on AI or investors might see them as falling behind, triggering a selloff. So yeah I guess it is a fact that GCP is selling compute to other AI companies but it makes sense because basically you can build capacity potentially for Gemini to use in the future while having other companies pay for some of that cost today.

In my mind, for hyperscalers — Google, Amazon dot com, Microsoft — competitors are not really enemies but rather partners. The real fear or threat is market uncertainty and customers souring on AI altogether. As long as customers are interested in this AI stuff, you could compete on merit or cost benefit ratio but if competitors start failing because they ran out of capacity or cash, that could send an unwanted message to the market.

To summarize though, I have to agree that the supposed rumors are better than rumors, they are facts and we could even make an educated guess that this is a part of a strategy, as much as you can strategize when it comes to an "industry" with a high fixed cost and an uncertain demand.