Anthropic has committed to a $200 billion, five-year spending agreement with Google Cloud, an amount so large that it represents more than 40% of Google’s entire cloud revenue backlog, as revealed to investors last week.
Key Highlights
- According to The Information, Anthropic has locked in $200b of spend with Google Cloud over 5 years.
- It makes up to 40% of Google Cloud’s revenue backlog previously shared with investors last week.
- With a $2 trillion backlog on AWS, Azure and Google Cloud combined, Anthropic and OpenAI alone now make up the majority of that overhang.
- In extended trading on the report, shares of Google’s parent Alphabet rose by some 2%.
- Alphabet too is putting $40 billionÂ
Anthropic Lands $200 Billion Google Cloud Deal Over Five Years
Anthropic has agreed to spend $200 billion with Google Cloud over five years, The Information reported. The number implies that Anthropic alone makes up greater than 40% of the revenue backlog that Google revealed to investors last week, a backlog based on long-term contracts from cloud customers. Shares of Alphabet gained roughly 2% in after-hours trading following the report.
Why Do Anthropics Need More Computing Power?
Anthropic is locking in tons of computing capacity from multiple cloud providers due to the huge demand for its Claude family of AI models. Anthropic, for its part, signed a deal in April with Google and chip partner Broadcom for multiple gigawatts of processing unit capacity that was due to be turned on from 2027.
Last month, Anthropic also signed a multi-year contract with cloud infrastructure company CoreWeave and plans to obtain nearly 1 gigawatt of capacity via Amazon’s chips by the end of the year. Anthropic trains and runs Claude using different types of hardware, including Amazon’s Trainium chips, Google TPUs (tensor processing units), and Nvidia GPUs (graphics processing units).
Massive Scale of AI Cloud Commitments
As reported this week, approximately half of the $2 trillion in revenue backlogs sitting across these three cloud providers, AWS, Microsoft Azure and Google Cloud, is now accounted for by Anthropic and OpenAI together. In yet another move, Alphabet is also putting as much as $40 billion directly into Anthropic, cementing a relationship with the firm that represents both its biggest cloud customer and at the same time its main competitor on the global AI stage. Alphabet, meanwhile, is set to knock Nvidia off as the world’s most valuable company thanks to its stunning stock surge and fast-growing cloud business.
FAQs
- How much is Anthropic planning to invest in Google Cloud?
$200 billion in five years, The Information reports
- How important is this to Google?Â
It’s more than 40% of Google’s total cloud revenue backlog set out to investors last week.
- Is Google simultaneously investing in Anthropic?Â
Yes, Alphabet is spending $40 billion on Anthropic, while also becoming its largest cloud provider.
- Are Anthropic and OpenAI dominating cloud backlogs?Â
Yes, combined, they represent over 50% of the $2 trillion in backlogs associated with AWS, Azure & Google Cloud.
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