Alphabet Inc. Class C (GOOG.US, GOOGL.US) intends to invest up to a maximum of $40 billion in Anthropic to strengthen its AI strategic layout.

Alphabet Inc. Class C, the parent company of Alphabet (GOOG.US, GOOGL.US), announced on Friday that they plan to invest up to $40 billion in Anthropic to further expand their long-term partnership and strengthen their strategic position in the artificial intelligence competition. According to the agreement, Alphabet Inc. Class C will first invest $10 billion in Anthropic at its latest valuation of $38 billion, with the remaining $30 billion dependent on the achievement of specific performance milestones. If the deal goes through in its entirety, it will be one of the largest investments in an AI startup in the technology industry. The market believes that this move highlights large tech companies competing for AI core capabilities with unprecedented levels of funding. Leading tech companies have been continuously investing billions of dollars into cutting-edge AI labs like OpenAI and Anthropic in recent years, with some of these investments flowing back to investors through cloud computing services and model revenue. Anthropic stated that this agreement is a further upgrade based on their long-term collaboration. Just earlier this month, Anthropic announced a partnership with Alphabet Inc. Class C and Broadcom Inc. to secure 5 gigawatts of computing power, with the related resources expected to go online next year and potentially increase computing power further in the future. Currently, Alphabet Inc. Class C provides access to Anthropic's Claude model through their cloud services to customers, competing with Amazon.com, Inc.'s AWS and Microsoft Corporation's Azure cloud services. Additionally, Alphabet Inc. Class C also offers its own tensor processing unit (TPU) as an alternative to NVIDIA Corporation's GPUs. However, while the two companies collaborate, there is also competition between them. Alphabet Inc. Class C has its own large-scale model Gemini, which is competing with Anthropic's Claude for market share of AI models and services. The cooperation between Alphabet Inc. Class C and Anthropic began in 2023, when Alphabet Inc. Class C invested $300 million in the company for approximately 10% stake; they later added another $2 billion investment a few months later. Prior to the announcement of this transaction, Alphabet Inc. Class C had already invested over $3 billion with a reported stake of approximately 14%. At the same time, Anthropic has been seeking to address infrastructure pressure caused by rapid growth in demand. The company stated that as the demand for Claude from enterprise customers, developers, and consumers continues to rise, its computing resources face "inevitable pressure." Previously, OpenAI had criticized Anthropic for its failure to secure sufficient computing resources. Analysts believe that the investment model of Alphabet Inc. Class C in this case is similar to the agreement Anthropic reached with Amazon a few weeks ago. At that time, Amazon.com, Inc. invested $5 billion in Anthropic and promised to invest up to an additional $20 billion based on specific business milestones. Anthropic's CEO Dario Amodei stated that as users increasingly rely on Claude to complete their work, the company must accelerate infrastructure development to match the rapid growth in demand, and the partnership with Amazon.com, Inc. will support their advancement in AI research and service over 100,000 customers building applications based on AWS.