On the surface a deal like this is ten-a-penny for any big chipmaker.  Google’s cloud market share is eight percent, just behind Amazon and Microsoft. It is unclear how many chips this deal will involve.

However, analysts are getting excited. AMD’s stock price has shot up by 30 percent since the deal’s announcement.

One of the reasons is that most of the big players in the cloud storage market use Nvidia’s GPUs and this is the first major deal by AMD into a growing market. However Nvidia is in the lead mostly because it was there first and has products which are tried and tested.

But the Google deal shows that AMD is quickly closing the gap with Nvidia. In fact this is the second cloudy deal it has secured in the last two months. The second was Alibaba.

The Google deal is not to turn itself into an AMD only shop – Google’s cloud will feature both AMD and Nvidia GPUs. But if the rest of the cloud-based service providers follow a similar path, AMD will start making a lot of dosh.

Cloud vendors are better off having two GPU suppliers anyway. For a start, it forces Nvidia to drop its prices because it has to compete.

AMD GPUs are cheaper, but perform at a slightly lower spec. Some cloud functions do not require the higher specs and would prefer a cheaper up-front cost. Either way the cloud industry appears to be ready to welcome AMD into its cloudy future which is one of the reasons analysts are so happy.