Reports indicate that Anthropic is in talks with Google for a cloud computing services agreement valued between $1 billion and $10 billion. Google has already invested approximately $3 billion in Anthropic and provides cloud services, a move that pushed Alphabet's shares up by 1.69% in after-hours trading. Another major investor in Anthropic, Amazon, also supplies computational resources to the company; this news caused Amazon’s shares to drop by 1.1% in after-hours trading.
Artificial intelligence startup Anthropic is in negotiations with Google over a cloud computing agreement potentially worth tens of billions of dollars, which would provide massive computational power support for Claude.
On October 21, media reports citing informed sources revealed that Anthropic and Google are discussing a cloud service agreement valued between USD 1 billion and USD 10 billion.
This deal will further solidify the partnership between Google and Anthropic. Google has previously invested approximately USD 3 billion in Anthropic and provided cloud services. Anthropic’s key investors also include Amazon, which similarly supplies computing resources to the company.
Boosted by this news, shares of Alphabet, Google's parent company, rose 1.69% in after-hours trading.
(Alphabet C rose 1.69% in after-hours trading)Strategic Boost for Google Cloud Business
This potential collaboration will strengthen Google Cloud’s position in the AI race. If the agreement is reached, Google will gain stronger leverage in competing against Amazon Web Services (AWS) and Microsoft Azure in the cloud services market.
As previously mentioned by WallstreetCN, Amazon recently experienced a cloud service outage, with its AWS division suffering a 15-hour disruption that affected over 1,000 clients.
Amazon's shares fell 1.1% in after-hours trading following reports of a potential deal between Anthropic and Google.
(Amazon shares fell 1.1% in after-hours trading)Google has already invested approximately $3 billion in Anthropic, including a $2 billion commitment made in 2023 and an additional $1 billion earlier this year.
This makes Google both an investor in Anthropic and its cloud service provider, forming a dual partnership.
For Anthropic, securing sufficient computing power is a prerequisite for achieving its aggressive growth targets. The company requires large-scale cloud resources to train and run its AI models to meet the growing demands of enterprise customers.
Anthropic’s Revenue Targets Are Aggressive
According to previous reports, Anthropic expects its annualized revenue growth rate next year to double or even nearly triple, driven by the rapid adoption of its enterprise products.
The company is on track to achieve an internal target of a $9 billion annualized revenue run rate by the end of 2025. Annualized revenue run rate is an annual revenue metric extrapolated from current sales velocity.
Founded in 2021 by former OpenAI employees, Anthropic focuses more on AI safety. Its Claude series of large language models compete with OpenAI’s GPT models, securing a position in the battle for AI dominance.
To advance the development of AI technology, this San Francisco-based company has been raising substantial capital.
The high demand for cloud computing highlights that AI development has become a capital-intensive industry. Leading technology companies are reshaping the tech landscape by securing top-tier startups through investments and partnerships.
