The fierce rivalry of today’s cloud giants is being replaced with something a little more collaborative. This week, historic competitors AWS and Google Cloud announced the launch of a cross-cloud interconnect service, effectively tearing down the digital iron curtain that once separated their ecosystems. With Microsoft Azure expected to join this framework in 2026, the cloud industry is pivoting toward “coopetition”– a strategic truce driven by the modern enterprise’s embrace of multi-cloud.
For CIOs, this shift represents more than just a technical convenience; it is a fundamental change in how enterprise strategy can and should be architected. The ability to fluidly move data between hyperscalers promises to unlock new efficiencies in AI and disaster recovery, but it also introduces a labyrinth of operational risks that require a new kind of leadership.
The catalyst: Why vendors are finally talking
The consensus among industry experts is that this thaw in relations is being driven not by vendor benevolence, but by sheer market force.
“Customer demand is pushing hyperscalers to move beyond a ‘winner takes all’ competitive posture, toward a more collaborative ecosystem,” said Jo Peterson, vice president of cloud, security and AI solutions at Clarify360. She noted that in this new climate, “partnerships and interoperability are essential to winning and retaining large enterprise business.”
Enterprise IT leaders have consistently rejected the idea of relying on a single vendor in recent years. The Flexara 2025 State of the Cloud Report found that 86% of 759 organizations utilize a multi-cloud approach. Vendors that make this difficult are therefore not successfully keeping their customers locked into their services; they are simply creating a worse customer experience. High egress fees and technical friction are no longer effective deterrents to multi-cloud strategy, with Flexera reporting consistently high multi-cloud numbers year over year.
Mohit Ahuja, strategy and transformation leader at Caterpillar Inc., said he sees this preference for multi-cloud deployments as risk-averse behavior that vendors could no longer ignore . “When customers consistently choose hybrid architecture despite integration pain, vendors could either facilitate a seamless integration or risk losing the opportunity to tap into a bigger market,” he said.
Moreover, achieving this integration through formal partnerships allows vendors to get in the door with new customers to which they might not previously have had access.
Jo Peterson, vice president of cloud, security and AI solutions, Clarify360
Breaking the AI deadlock
One of the primary drivers accelerating AWS and Google’s cross-cloud interconnect service is AI. The potential of enterprise AI has been hampered by data silos, with fragmented pockets of information trapped in different systems, which then prevents the training of comprehensive models. MuleSoft’s 2025 Connectivity Benchmark Report found that integration challenges are a leading cause of stalled AI initiatives, with nearly 95% of 1,050 IT leaders surveyed citing connectivity issues as a major hurdle.
A cross-cloud partnership is a critical tool for dismantling these barriers — one that could even eliminate the challenge of data silos, according to Ahuja. By removing the friction of moving data between an AWS storage bucket and a Google Cloud AI model, these collaborations enable companies to enhance AI adoption — “which all CIOs would welcome for operational efficiency,” he said.
Peterson agreed, identifying the strongest use cases for this new interoperability as those requiring specialized vendor services, as well as disaster recovery and geopolitical compliance. For example, under the new AWS and Google collaboration, a CIO would be able to leverage AWS’s expansive infrastructure while simultaneously utilizing Google’s specialized AI research tools, without the integration complexity that previously plagued the architectures.
Mohit Ahuja, strategy and transformation leader, Caterpillar Inc.
The risk equation: Complexity and accountability
However, coopetition is not a silver bullet. It also introduces new friction points where the complexity of managing multiple environments can outweigh the benefits if not addressed properly. Peterson warned that there may not be sufficient value when workloads are “highly dependent and intertwined, requiring low-latency communication across different providers”. The physical laws of latency do not change just because vendors have signed a partnership agreement; instead, more pressure is put on IT teams.
For Ahuja, the more pressing issue is operational risk and accountability. In a shared ecosystem, who owns the crash?
“[Interconnectivity] increases risk exposure in critical systems, despite the operational benefits,” Ahuja cautioned, explaining that managing failure response across organizational boundaries could be challenging, both from a technical and a vendor relationship standpoint. If a critical application fails at the intersection of one company’s compute instance and another’s database, the resulting blame game could undermine incident response efforts.
To mitigate this, Peterson advised a rigorous approach to vendor management. She recommended that CIOs “establish clear communication, define incident response roles and use a risk framework that includes vendor-specific assessments”. It is no longer enough to trust a vendor’s uptime service-level agreement; CIOs must now evaluate each vendor’s individual incident response plans and assess the overall impact of a potential incident across all clouds and boundaries.
The CIO as business strategist
Ultimately, the era of cloud coopetition signals an evolution in the CIO role. The days of simply selecting a single vendor and managing technical implementation are fading.
“Coopetition accelerates the need for CIOs to think and act like business strategists,” Peterson said, noting that success now hinges on “market-level decisions, not just technical implementation.”.
This trend may soon ripple beyond the cloud. Peterson predicted that by 2030, the IT industry could see surprising cooperation between similarly competitive rivals in other sectors. She hypothesized a potential partnership between Apple and Meta to establish interoperable standards for the spatial computing market. Alternatively, Tesla and traditional automakers could begin sharing autonomous driving technology to accelerate industry-wide production.
For the modern CIO, the message is clear: The walls are coming down — and the guardrails are up to you. Success in this new environment requires robust contractual clarity, architectural discipline and a mindset that embraces collaboration without ignoring the complexities of shared responsibility. As Ahuja said, CIOs must demand “crystal-clear incident response protocols and security ownership” before trusting the promises of these new partnerships.
