Google, Anthropic announce cloud deal worth tens of billions

Alphabet Inc.’s Google will supply up to 1 million of its specialised AI chips to Anthropic PBC, a deal worth tens of billions of dollars that deepens its partnership with the fast-growing artificial intelligence startup.

The arrangement, announced Thursday, gives Anthropic vastly more computing capacity while cementing Google’s position as both a major investor and key infrastructure provider in the escalating race to power large AI models.

The tensor processing units, or TPUs — Google’s custom-designed chips that accelerate machine learning workloads — are slated to be deployed in 2026, bringing more than a gigawatt of capacity online relatively soon, Google said in a statement. The deal ranks among the largest commitments yet in the AI hardware arms race, underscoring the soaring cost of developing cutting-edge AI systems that require immense computing power to train and run large language models.

Google declined to comment on how Anthropic plans to pay it for the TPU access. Anthropic didn’t respond to a request for comment.

“Anthropic and Google have a longstanding partnership and this latest expansion will help us continue to grow the compute we need to define the frontier of AI,” said Krishna Rao, chief financial officer of Anthropic, in the statement.

By tapping into Google’s TPUs, Anthropic gains access to one of the most advanced chip infrastructures outside of Nvidia Corp.’s offerings, reducing its reliance on scarce and costly GPUs.

The company’s move to expand the partnership with Google, the No. 3 cloud provider behind Amazon.com Inc. and Microsoft Corp., also signals its confidence in Google’s specialised AI technology. Shares of Amazon, which is both a major investor in Anthropic and one of its main cloud providers, slipped after Bloomberg first reported on the deal discussions on Tuesday, while Google’s stock rose.

Google has already invested about $3 billion in Anthropic, including $2 billion in 2023 and another $1 billion early this year. Amazon, meanwhile, has pledged up to $8 billion and provides the AI startup with its own custom chips through Amazon Web Services. Anthropic relies on both companies’ cloud services to train and deploy its Claude family of large language models, which compete with OpenAI’s GPT lineup and Google’s Gemini AI systems.

Anthropic recently held early funding talks with Abu Dhabi-based investment firm MGX, about a month after closing a $13 billion funding round. That financing, led by Iconiq Capital, with Fidelity Management and Research Co. and Lightspeed Venture Partners as co-leads, nearly tripled Anthropic’s valuation to $183 billion, including dollars raised.

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