AI computing power demand skyrockets! Google Cloud Platform secures a $1.2 billion deal with ServiceNow

According to Zhitong Finance APP, American cloud computing and search engine giant Google (GOOGL.US) has signed a large cooperation agreement worth over $1 billion with ServiceNow Inc. (NOW.US), a company focused on optimizing digital workflows, to provide cloud computing services that include cloud AI training/inference computing power resources. This is a significant victory for Google Cloud, the cloud service platform under Google, as it strives to attract large enterprises to its cloud computing platform, and it will also drive the continued growth of cloud computing business revenue, which has expanded significantly in recent years amid the AI boom.

According to media reports, an anonymous insider familiar with the agreement revealed that ServiceNow has committed to spending approximately $1.2 billion over five years. ServiceNow stated that the company has signed cooperation agreements with multiple cloud computing platforms to obtain the services provided and declined to disclose the amount of individual contracts. Google declined to comment.

For many years, many large enterprise clients have been using industry leaders Amazon Web Services (AWS) or Microsoft's Azure cloud platform, but the strong rise of Google Cloud has broken this trend. Google's powerful Gemini AI application development-deployment-cloud AI computing power resource ecosystem, combined with AI large model Google digital advertising marketing service ecosystem, has attracted a large number of enterprise clients to switch to Google Cloud.

In February of this year, CRM software giant Salesforce Inc. agreed to purchase $2.5 billion worth of cloud computing services from Google Cloud, marking the company's gradual shift from long-time AWS cloud supplier to Google. This year, Google has also added ChatGPT generative AI leader OpenAI to its client list.

As the third-ranked player in cloud computing market share, Google Cloud is seen as the strongest growth engine for Google's parent company Alphabet as its core search business matures. This cloud computing business benefits from the company's massive investments in the AI ecosystem, and Google's expertise in this emerging technology has helped Google Cloud win a large number of enterprise clients, especially many AI startups. Alphabet's earnings report released on Thursday showed that Google's cloud computing business revenue surged 32% year-on-year in the second quarter, reaching $13.6 billion.

ServiceNow Intensifies AI Layout

ServiceNow's cloud-based software platform helps enterprises organize and automate their digital operating models in areas such as human resources and information technology. In a document released on Thursday, the company disclosed a commitment amount for cloud computing services of approximately $4.8 billion through 2030. Its Chief Product Officer Amit Zavery, who previously served as an executive at Google Cloud, joined ServiceNow in October 2024 In recent years, ServiceNow has transformed into a large software company focused on providing cloud computing platforms to help global enterprises efficiently optimize digital workflows. ServiceNow specializes in helping businesses manage and automate workflows, with its cloud-based software platform used to integrate business processes, improve operational efficiency, and optimize performance in areas such as service management, operations management, and business analytics. Like almost all of its software industry peers, ServiceNow is intensifying efforts to incorporate generative artificial intelligence capabilities into its product portfolio and offer more expensive subscription versions of these software tools, thus creating an urgent need for the vast cloud computing capacity provided by Google Cloud Platform and the larger-scale cloud AI training/inference computing resources offered by Google Cloud.

Amid the frenzy of global enterprises investing heavily in AI technology, ServiceNow has gained favor among numerous corporate users with its cloud computing software services embedded with generative AI, as well as its Now Platform that supports developers in creating custom generative AI applications similar to ChatGPT based on the platform. This has driven the company to achieve strong growth in performance since 2024, leading to its stock price repeatedly hitting historical highs.

ServiceNow has successfully launched several new tools based on generative AI capabilities, focusing on Now Assist and Generative AI Controller. These tools are designed to significantly enhance work efficiency based on the company's NOW platform, streamline project deployment processes, and provide intelligent user experiences while accelerating enterprise IT solutions through automation and low technical barrier models.

The most noteworthy for investors is the launch of the Generative AI Controller by ServiceNow, which allows developers to easily implement generative AI features within the platform through a low-barrier development model, such as AI customer service, text automation generation, and business and data intelligence queries. With this feature, developers can create or optimize enterprise AI applications using low-code or no-code methods, similar to the generative AI application developer ecosystems of Microsoft Azure and Amazon AWS.

The demand for AI computing power continues to surge, and Google is one of the biggest beneficiaries.

For Google, large orders from ServiceNow are expected to drive its cloud computing business to continue on a trajectory of explosive growth. The second-quarter financial report released on Thursday morning showed that Google's cloud computing business is one of the biggest beneficiaries of the unprecedented global AI boom, with overall cloud computing revenue reaching $13.6 billion, a year-on-year increase of 32%, accelerating from the 28% growth rate in the first quarter.

Google's AI business is advancing comprehensively, with its Gemini generative AI application ecosystem boasting over 450 million monthly active users, and daily request volume increasing by over 50% compared to the first quarter. The demand for inference computing power at the AI application layer continues to surge, processing over 980 trillion tokens per month, doubling from 480 trillion in May. From the underlying AI infrastructure centered on Google TPU and NVIDIA AI GPU to the top-layer Gemini AI application ecosystem, Google has ensured its differentiated advantage in the AI competition through a full-stack layout The generative AI leader Anthropic, known as the "OpenAI rival," predicts that by 2027, AI large models will have the capability to automate nearly all white-collar jobs. Therefore, the demand for AI computing power driven by generative AI applications and AI agents at the reasoning end can be described as "vast as the stars and the sea," and is expected to drive the artificial intelligence computing power infrastructure market to continue showing exponential growth. The "AI reasoning system" is also considered by Jensen Huang to be the largest source of future revenue for Nvidia. At Nvidia's earnings conference at the end of May, Jensen Huang optimistically predicted that the Blackwell series will set the record for the strongest AI chip sales in history