What’s going on here?

Amazon and Google just linked their cloud empires, launching a joint private network that lets customers fire up high-speed connections between Amazon Web Services (AWS) and Google Cloud in minutes instead of weeks.

What does this mean?

The new service ties together AWS’s Interconnect multicloud offering and Google Cloud’s Cross-Cloud Interconnect, so companies can shuttle data and applications between the two platforms over a dedicated private link instead of the public internet. That matters in an AI-heavy world where models chew through massive datasets and small delays can wreck performance. It also arrives just weeks after an October 20 AWS outage that knocked out thousands of sites – from Snapchat to Reddit – and could cost US firms an estimated $500 million to $650 million, according to Parametrix. By tightening interoperability, both firms are betting that large customers will want the flexibility to run workloads where it makes the most sense – compute on one cloud, analytics on another – without giving up speed or reliability. With AWS pulling in about $33 billion in revenue last quarter and Google Cloud generating roughly $15 billion, this looks less like a truce and more like a way to keep big spenders active on both platforms as AI demand ramps up.

Why should I care?

For markets: Co-opetition powers the next phase of cloud growth.

AWS is still the world’s biggest cloud provider, with quarterly revenue more than double Google Cloud’s and ahead of Microsoft’s Azure by overall market share. But Alphabet, Microsoft, and Amazon are all pouring billions into new data centers, fiber networks, and specialized chips to keep up with AI-driven traffic. This kind of “co-opetition” – teaming up on the pipes while battling for higher-value services like AI models and databases – hints that future growth could cluster in higher-margin software and data platforms layered on top of increasingly shared infrastructure. And with early adopters like Salesforce already using the new multicloud setup, it’s clear that big enterprises want redundancy and bargaining power across providers, not a lifetime lock-in with a single giant.

The bigger picture: Cloud is becoming the core utility of the AI economy.

AI’s rapid rollout is turning cloud capacity into something more like electricity or water – a basic utility that many businesses can’t function without. That’s pushing providers to make their networks more resilient and interconnected, especially after outages that can wipe out hundreds of millions of dollars in a single day. As multicloud setups get easier to deploy, regulators and governments could start to see them as a way to curb systemic risk from any one provider’s failure. Over time, expect more cross-cloud alliances and standardized “data highways”, as countries, companies, and developers all push for faster, cheaper, and more reliable access to the computational backbone of the digital economy.