Google plans to invest up to US$40 billion in Anthropic

Even as Google pours more money into Anthropic, the companies are also battling to be the first to create AI that can match humans’ capabilities. Photo by Samyukta Lakshmi/Bloomberg

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Google will invest US$10 billion in Anthropic PBC, with another US$30 billion potentially to follow, strengthening the relationship between two companies that are at once partners and rivals in the race to build artificial intelligence.

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Anthropic said that Google is committing to invest US$10 billion now in cash at a US$350 billion valuation, the same amount it was valued at in a funding round in February, not including the recent money raised. The Alphabet Inc.-owned company will invest another US$30 billion if Anthropic hits performance targets, the startup said Friday, and support a significant expansion of Anthropic’s computing capacity.

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Anthropic has ramped up its fundraising amid the breakout success of Claude Code, an AI agent that speeds the process of writing computer software. The startup said earlier this week that it nabbed another US$5 billion from Amazon, also at a valuation of $350 billion, with the option to inject another US$20 billion over time. Anthropic raised US$30 billion in February and investors have since sought to back the firm at a valuation of US$800 billion or more.

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Anthropic is a major customer of Google’s chips and cloud services, businesses that Google is striving to grow as its main moneymaker, search advertising, matures. Google Cloud will provide five gigawatts worth of computing capacity to Anthropic over the next five years, and several more gigawatts could follow. The deal marks an expansion of an agreement announced earlier this month between Anthropic, Google and Broadcom Inc. (A single gigawatt is enough to power about 750,000 United States homes at any given time.)

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Shares of Google were up more than one per cent on Friday after the news, trading at US$341 as of 12:03 pm. Google’s tensor processing units, or TPUs, are one of the best alternatives to Nvidia’s chips, making them a scarce and precious resource for Anthropic and other AI developers in a business that requires tremendous amounts of computing power.

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Anthropic, which is considering an initial public offering as soon as October, has been on the hunt for more infrastructure to meet growing demand for its products. Claude Code has quickly become the go-to for engineers across Silicon Valley, including some at Google, spurring a scramble in the rest of the industry to catch up. Anthropic’s Cowork agent, which does not require coding skill and can be used to complete a wider range of tasks, is also growing quickly, according to the company.

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Anthropic chief executive Dario Amodei worked at Google as an AI researcher earlier in his career. The companies have maintained close ties since Amodei founded Anthropic with a group of former OpenAI employees in 2021. Last year, Google said it would provide up to 1 million of its TPU chips to Anthropic, in a deal worth tens of billions of dollars. The search giant had already invested about US$3 billion into the startup by that point.