Google Chose Licensing Deals Over Consulting - That May Be the Smarter Bet

Alphabet is discussing an omnibus licensing agreement with Blackstone, KKR, and EQT that would let each firm's portfolio companies use Gemini models. The deal is still at the non-exclusive negotiation stage, and no final agreement has been reached.

The three companies' approaches are clearly different.

• OpenAI chose a consulting-style model, building a $10 billion Deployment Company with TPG that embeds engineers directly inside client companies.
• Anthropic also formed a $1.5 billion joint venture and is taking a similar approach, redesigning client workflows.
• Rather than building out its own consulting organization, Google is opting to deploy broadly through licensing and leave implementation to an ecosystem of outside partners.

Google has already been growing implementation partners like Accenture, Deloitte, KPMG, PwC, and NTT DATA through a $750 million partner fund. Layering a licensing deal that bundles entire private equity portfolios on top of that means Gemini could be rolled out to thousands of companies through a single commercial transaction.

The backdrop is strong too. Alphabet's market cap has surpassed $4.6 trillion, and Google Cloud broke through $20 billion in quarterly revenue for the first time, growing 63%. Cloud backlog swelled to over $460 billion, and generative AI product revenue grew nearly 800% year over year.

The key point is that Google is giving up some depth of implementation in exchange for speed and scale. Blackstone is both an investor in the Anthropic joint venture and a potential Google customer, and it recently launched Blackstone N1 to strengthen its dedicated organization for AI and high-growth tech investments. In the end, the outcome hinges on whether Gemini is mature enough to run across thousands of portfolio companies without separate customization.