Report: Anthropic pledges to spend $200 billion on Google Cloud services

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Alphabet Inc. Class A

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- Anthropic, an artificial intelligence firm, has pledged to spend $200 billion on Google Cloud services over five years as part of a recently concluded agreement, The Information reported, citing a source familiar with the matter.

The report stated that this pledge indicates the AI startup accounts for more than 40 percent of the accumulated revenue Google disclosed to investors last week. Accumulated revenue reflects contractual obligations from cloud service customers.

Shares of Alphabet, Google's owner, rose by about two percent during trading on Tuesday following the release of the report.

In April, Anthropic signed an agreement with Google and its chip technology partner Broadcom to provide up to several gigawatts of AI chip processing units (TPUs) expected to enter service starting in 2027.

Alphabet is also investing up to $40 billion in Anthropic, deepening its partnership with the AI startup that is also its global competitor in this technology.

The US-based digital news site reported that contracts involving Anthropic and OpenAI currently make up more than half of the $2 trillion backlog of orders at major cloud service providers such as Amazon Web Services, Microsoft Azure and Google Cloud Platform.

Reuters has not yet been able to verify this report. Anthropic declined to comment, while Google referred inquiries to the AI company.

Strong demand for its artificial intelligence (AI) cloud platform has prompted Anthropic to sign a series of major agreements to acquire more computing capacity.

Anthropic struck a multi-year deal last month with cloud infrastructure company CoreWave, and is also set to acquire nearly 1 gigawatt of capacity through Amazon chips by the end of the year.

Anthropic said it trains and runs Cloud on a range of AI tools including Trinium, Amazon Web Services, Google's GPUs, and graphics processing units made by Nvidia.

Meanwhile, Alphabet is poised to overtake Nvidia to become the world’s largest company by market capitalization, driven by a record-high stock price surge thanks to its efforts in artificial intelligence and the boom in its cloud services business.