Google plans to invest up to $40 billion in AI startup Anthropic, deepening a relationship between two companies that compete directly in the AI market while also depending on each other commercially.
Google will commit $10 billion immediately, valuing Anthropic at $350 billion. An additional $30 billion may follow if Anthropic meets certain performance targets, according to Anthropic. Google Cloud will also provide Anthropic with 5 gigawatts of computing capacity over the next five years, with the possibility of further expansion. This builds on an agreement announced earlier this month between Anthropic, Google, and chipmaker Broadcom.
Anthropic relies heavily on Google for infrastructure, particularly its tensor processing units (TPUs), specialized chips designed for AI workloads that are considered a strong alternative to processors made by Nvidia.
The investment comes as Anthropic has seen strong demand for its products, especially Claude Code, an AI tool that helps engineers write software more quickly. The company has been actively seeking infrastructure deals to meet that demand. Earlier this week, Amazon announced an additional $5 billion investment in Anthropic, also at a $350 billion valuation.
Some financial analysts have raised concerns about so-called circular deals, in which large technology companies both invest in AI startups and sell them computing capacity. Google faces a similar dynamic with other AI firms it backs.
Anthropic is also reportedly considering an initial public offering as soon as October.
Sources: TechCrunch, Bloomberg
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