Tech giant Google (GOOGL) could enter into a non-exclusive cloud computing deal with venture firm Sequoia Capital, according to an exclusive report by Axios. As a part of this deal, Sequoia-backed AI startups can access up to $500,000 in free cloud computing and training services from Google.
This new partnership builds on Google’s existing support for AI startups. The tech giant already offers up to $350,000 in cloud credits to firms linked to Y Combinator, another venture capital firm. These startups also have access to Nvidia’s (NVDA) graphics processing units (GPUs) and Google’s tensor processing units. Tensor processing units are integrated circuits developed by Google for AI applications.
Why Is This Deal Significant for GOOGL?
This deal is significant for the tech giant as it could potentially give Google an edge over its competitors like OpenAI and Microsoft (MSFT) in securing new customers by offering substantial savings to Sequoia-backed startups. Notably, Microsoft has its own cloud computing support programs, offering up to $150,000 in Azure credits for AI startups, along with mentorship and guidance.
Meanwhile, Sequoia partner Bogomil Balkansky told Axios that this deal is particularly beneficial for pre-seed startups with limited funding, as cloud costs can consume a large portion of their budgets.
Is Google Stock a Buy or Sell?
Analysts remain bullish about GOOGL stock, with a Strong Buy consensus rating based on 30 Buys and nine Holds. Over the past year, GOOGL has increased by more than 15%, and the average GOOGL price target of $201.64 implies an upside potential of 24.8% from current levels.
