Google (GOOGL) Stock; Gains as Cloud Unit Lands Major AI Startup Deal With Thinking Machines Lab

TLDRs;

• Google Cloud signs multi-billion-dollar deal with Thinking Machines Lab to support AI infrastructure needs.
• Mira Murati’s startup secures major compute resources shortly after launching and raising $2 billion.
• Google strengthens its position in competitive AI cloud market through strategic partnerships.
• Rising AI model complexity increases demand for cloud computing and raises new safety concerns.

Alphabet’s stock (GOOGL) edged higher after its cloud division secured a major multi-billion-dollar agreement with Thinking Machines Lab, the artificial intelligence startup founded by former OpenAI executive Mira Murati. The deal, reportedly worth a single-digit billion US dollars, strengthens Google Cloud’s position in the increasingly competitive race to serve frontier AI companies.

The partnership gives Thinking Machines Lab access to Google’s large-scale computing infrastructure, which is essential for training and running advanced AI systems.

The startup has been rapidly building momentum since its launch in early 2025, following Murati’s departure from OpenAI. It later raised $2 billion in seed funding at a valuation of $12 billion, signaling strong investor confidence in its long-term ambitions.

Murati’s AI venture scales fast

Thinking Machines Lab has positioned itself as one of the more ambitious entrants in the AI infrastructure and model-building space. The company released “Tinker” in October, a tool designed to help developers build custom AI models using reinforcement learning techniques.

Alphabet Inc., GOOGL

While Tinker is aimed at simplifying parts of AI model development, it is also computationally intensive, requiring significant cloud resources. That need for high-performance computing is a key reason behind the new agreement with Google Cloud, which will support the startup’s scaling efforts.

The partnership also marks Thinking Machines Lab’s first major cloud provider deal, following earlier collaborations involving hardware support from Nvidia. This shift toward a broader cloud infrastructure strategy signals its intent to compete at the frontier of AI model development.

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Google Cloud strengthens AI positioning

For Alphabet, the deal reinforces Google Cloud’s growing role as a core infrastructure provider for advanced AI firms. The agreement places Google alongside other major cloud providers competing for long-term contracts with leading AI labs.

Source: Mira Murati’s TML signed a deal with Google Cloud, valued in single-digit billions, to access Google’s latest AI systems built on Nvidia’s GB300 chips (@rebeccabellan / TechCrunch)

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The move reflects a broader trend in the tech industry: cloud companies are increasingly competing not just on enterprise services, but on their ability to power frontier AI development. Similar agreements have been seen across the sector, including partnerships involving Anthropic and other large model developers working with both Google and Amazon.

By securing Thinking Machines Lab as a customer, Google Cloud strengthens its position in a high-growth but capital-intensive segment of the market.

AI infrastructure demand surges

The deal highlights the growing cost and complexity of training modern AI systems. Tools like Tinker rely heavily on reinforcement learning and large-scale compute clusters, making cloud infrastructure a critical dependency rather than an optional service.

However, this shift also introduces new challenges. Industry observers note that advanced model-building tools can carry security risks if not properly controlled. Even relatively low-cost manipulation of training systems can influence model behavior in unintended ways, raising concerns about safety and oversight.

At the same time, the demand for compute power is accelerating competition among cloud providers, with AI startups emerging as some of the most valuable and resource-intensive customers in the industry.