C3 AI has signed a sweeping partnership deal with Google Cloud, the two companies plan to announce Wednesday, in what C3 AI CEO Tom Siebel called a "precedent-setting" deal.
Under the terms of the agreement, all of C3 AI's software tools for building and deploying applications around artificial intelligence models will now run on Google Cloud. The two companies will also work together to make some of Google's core cloud tools — BigQuery, Vertex AI and Google Kubernetes Engine — work more closely with C3 AI's services.
"This is a very large-scale initiative that I think will be precedent setting in the enterprise AI application space and in the hyperscaler space," Siebel told Protocol. "I believe there is no hyperscaler and no enterprise AI application company that has formed a partnership this deep, this broad and this meaningful at global scale."
Partnerships are quite common in enterprise tech; C3 AI's flagship AI Suite runs on all three major clouds, and it signed a similar partnership deal with Microsoft in 2018 that included co-development and cross-selling agreements. But according to Google Cloud CEO Thomas Kurian, these two companies have a lot in common.
"We recognize customers have multiple hyperscalers they work with and [there are] also multiple software companies running on us, and Tom's organization needs to continue to support multiple cloud providers," Kurian told Protocol. However, "I think we were one of the first companies to share that vision that Tom's been working on for 10-plus years and so the alignment in our understanding from a go-to-market perspective and how we talk to customers together [is] materially different."
Kurian and Siebel are two sales veterans who have been both fierce competitors and colleagues in the small world of enterprise tech. Siebel founded customer-relationship management company Siebel Systems in 1993 and sold it to Oracle in 2006. Kurian started at Oracle in 1996 and eventually worked his way up to president before leaving in 2018 to become CEO of Google Cloud the following year.
That familiarity extends lower in the executive ranks; Sam Alkharrat, president and chief revenue officer at C3 AI, worked closely with Rob Enslin, president of cloud sales at Google, at longtime Oracle rival SAP.
"We have been and we are being very careful to align the incentives of both sales organizations, so they are highly incentivized to work together," Siebel said. "We understand the way the compensation structures work and what motivates sales people."
Cloud companies are highly motivated to sell AI services because of the computational requirements involved.
Building AI models requires a lot of storage for the massive data sets needed to really unlock insights, and processing them taxes cloud servers more and more every year. Higher-level AI tools that help companies that can't afford top-tier data scientists — that is, most companies — use AI in their applications also tend to carry better margins than lower-level services like compute and storage.
Specific terms of the agreement were not released, but the companies said they had struck a "multiyear" partnership.
