Up to $10 billion! Google in talks with Anthropic over cloud computing deal, Alphabet shares rise after hours

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Artificial intelligence startup Anthropic is negotiating a cloud computing deal worth tens of billions of dollars with Google, a potential transaction that will provide large-scale computing capacity for Claude.

On October 21, according to media sources, Anthropic and Google are in discussions about a cloud computing service agreement valued between $1 billion and $10 billion.

This deal would strengthen the partnership between Google and Anthropic. Google has previously invested about $3 billion in Anthropic and provided cloud services. Other major investors in Anthropic include Amazon, which also provides computing resources to the company.

Boosted by this news, Alphabet, Google’s parent company, saw its stock price rise by 1.69% in after-hours trading.

(Alphabet C up 1.69% after-hours)

Google Cloud Business Receives Strategic Boost

This potential partnership would reinforce Google Cloud’s position in the AI race. If the deal is reached, Google will gain a stronger edge in competing with Amazon AWS and Microsoft Azure in cloud services.

As previously reported by Wallstreetcn, Amazon recently suffered a cloud service outage, with its AWS division experiencing a 15-hour failure that impacted over 1,000 clients.

Following news of the potential Anthropic-Google deal, Amazon’s stock price fell 1.1% in after-hours trading.

(Amazon stock down 1.1% after-hours)

Previously, Google had invested about $3 billion in Anthropic, including a $2 billion commitment in 2023 and an additional $1 billion earlier this year.

This makes Google both an investor in and cloud service provider for Anthropic, creating a dual collaboration relationship.

For Anthropic, securing sufficient computing capacity is a prerequisite to achieving its aggressive growth goals. The company needs large-scale cloud resources to train and run its AI models to meet the growing demands of enterprise clients.

Aggressive Revenue Targets for Anthropic

According to previous reports, Anthropic expects its annualized revenue growth to double or even nearly triple next year, driven by the rapid adoption of its enterprise products.

The company is moving toward an internal goal of reaching an annualized revenue run rate of $9 billion by the end of 2025. The annualized revenue run rate is an indicator that forecasts yearly revenue based on the current sales pace.

Anthropic was founded in 2021 by former OpenAI employees, aiming for greater focus on AI safety. The company’s Claude series of large language models competes with OpenAI’s GPT models, occupying a place in the battle for AI dominance.

To advance AI technology, this San Francisco-based company has been raising substantial funds.

The huge demand for cloud computing highlights how AI development has become a capital-intensive business. Leading tech companies are reshaping the technology landscape by investing in and partnering with top startups.

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