Google has announced plans to invest up to US$40 billion in Anthropic PBC, significantly strengthening the relationship between the two companies as they compete to lead the artificial intelligence race. The Alphabet Inc.-owned company will initially invest US$10 billion in cash at a US$350 billion valuation, matching Anthropic's valuation from a funding round in February. An additional US$30 billion may follow if Anthropic meets specific performance targets, according to the startup's announcement on Friday.
Strategic Partnership and Rivalry
Anthropic is a major customer of Google's chips and cloud services, key growth areas for Google as its core search advertising business matures. The deal includes a commitment from Google Cloud to provide five gigawatts of computing capacity to Anthropic over the next five years, with potential for more. This expands on an earlier agreement between Anthropic, Google, and Broadcom Inc. A single gigawatt can power approximately 750,000 US homes at any given time.
Shares of Google rose over 1% on Friday, trading at US$341 as of 12:03 pm. Google's tensor processing units (TPUs) are among the leading alternatives to Nvidia's chips, making them a critical resource for Anthropic and other AI developers requiring immense computing power.
Anthropic's Rapid Growth
Anthropic has accelerated its fundraising efforts following the breakout success of Claude Code, an AI agent that streamlines software development. The startup recently secured an additional US$5 billion from Amazon, also at a US$350 billion valuation, with the option for another US$20 billion over time. In February, Anthropic raised US$30 billion, and investors have since sought to back the company at valuations of US$800 billion or more.
Anthropic is considering an initial public offering as early as October and has been seeking more infrastructure to meet rising demand for its products. Claude Code has become a go-to tool for engineers across Silicon Valley, including some at Google, prompting industry-wide efforts to catch up. Anthropic's Cowork agent, which requires no coding skills and handles a broader range of tasks, is also growing rapidly, the company said.
Background and Leadership
Anthropic CEO Dario Amodei previously worked as an AI researcher at Google. He founded Anthropic in 2021 with a group of former OpenAI employees. The companies have maintained close ties since then. Last year, Google committed to providing up to 1 million of its TPU chips to Anthropic in a deal worth tens of billions of dollars, building on earlier investments of about US$3 billion.
