The arms race of AI infrastructure is heating up. Alphabet Inc. Class C (GOOGL.US) and Anthropic have reached a huge deal of one hundred billion chips!

Alphabet Inc. Class C, under Alphabet (GOOGL.US), will supply up to 1 million specialized artificial intelligence chips to the emerging AI company, Anthropic PBC. This multi-billion dollar order further deepens the partnership between the two companies. The arrangement announced on Thursday provides Anthropic with more powerful computing support, while solidifying Alphabet Inc. Class C's position as a major investor and key infrastructure supplier in the increasingly competitive field of large-scale AI model development. Alphabet Inc. Class C stated in the announcement that the deployment of the Tensor Processing Unit (TPU) planned for 2026 will bring capacity of over one billion watts, making it one of the largest orders in the AI hardware arms race. Developing and training cutting-edge AI systems requires vast computing power, and costs are skyrocketing. Krishna Rao, CFO of Anthropic, stated in the announcement, "Anthropic has established a long-term partnership with Alphabet Inc. Class C, and this latest collaboration will help us continue to enhance our computing power and explore new frontiers in AI." By adopting Alphabet Inc. Class C TPU, Anthropic gains access to the most advanced chip infrastructure outside of NVIDIA Corporation products, reducing reliance on scarce and expensive GPUs. The company, doubling down on its investments after Amazon.com, Inc. and Microsoft Corporation, also demonstrates its recognition of Alphabet Inc. Class C's specialized AI technology. As one of Anthropic's major investors and cloud service providers, after reporting related negotiations on Tuesday, Amazon.com, Inc.'s stock price fell while Alphabet Inc. Class C's stock price rose. Alphabet Inc. Class C has invested approximately $3 billion in Anthropic, including $2 billion in 2023 and $1 billion earlier this year. Meanwhile, Amazon.com, Inc. has committed to investing $8 billion and providing the AI startup with custom chips through Amazon.com, Inc.'s cloud service (AWS). Anthropic relies on the cloud services of these two companies to train and deploy the Claude Mega Model Series, competing alongside OpenAI's GPT series and Alphabet Inc. Class C's Gemini AI system. Following a $13 billion funding round led by Iconiq Capital, with participation from Fidelity Management & Research Company and Lightspeed Venture Partners about a month ago, Anthropic recently engaged in early funding discussions with Abu Dhabi-based investment firm MGX. This round of funding raised its valuation (including the funding amount) to $183 billion, nearly doubling it.