Anthropic and Google ponder AI deal worth tens of billions

"Discussions are still in the early stages, but Google and Claude creator Anthropic are considering a cloud agreement worth tens of billions of dollars. This would allow Anthropic to use Google's AI computing power. Google, itself an investor in Anthropic, would already see a significant return on its investment under the agreement. It has invested approximately $3 billion in two investment rounds in the AI company."

"Meanwhile, Anthropic is earning more and more from the use of Claude. CEO Dario Amodei (photo) called his company "the fastest-growing software company in history" this week, with annual revenue growing from $1 billion to $7 billion in the past nine months. As impressive as this amount is, the staggering costs of developing new AI models are once again evident. According to Bloomberg sources, the proposed Google deal is worth tens, and probably close to a hundred, billions."

"The agreement would be good news for Google in any case. In addition to a new source of income, the tech giant is gaining confidence in its own TPUs (Tensor Processing Units), which are essentially AI chips that serve as an alternative to Nvidia's and AMD's GPUs. Google Cloud customers can choose between these AI chips for running or developing their models. For AI players such as Anthropic, it is clear that any new power source for running AI workloads is welcome."

Google and Anthropic are negotiating a cloud deal potentially worth tens to nearly a hundred billion dollars that would let Anthropic run Claude on Google Cloud. Google invested about $3 billion in Anthropic while Amazon/AWS has invested about $8 billion, creating competition between hyperscalers. Anthropic's Claude models compete with OpenAI's GPT and Google's Gemini. Anthropic reported rapid revenue growth from $1 billion to $7 billion over nine months, but AI model development costs remain enormous. The agreement would provide Google additional revenue and validate its TPUs as an alternative to Nvidia and AMD GPUs.

Read at Techzine Global