Alphabet stock climbs 2% on report of massive Anthropic deal

Investing.com -- Alphabet Inc. (NASDAQ: GOOGL) rose 2% in after-hours trading Tuesday following a report that Anthropic has committed to spending approximately $200 billion with Google Cloud over the next five years.

The Information reported that the deal, set to begin in 2027, accounts for more than 40% of Google’s total cloud revenue backlog recently disclosed to investors. The agreement follows Google’s commitment to provide Anthropic with 5 gigawatts of server capacity.

The massive commitment highlights the growing interdependence between cloud providers and artificial intelligence companies. Google, Amazon, and Microsoft have invested billions in AI firms including Anthropic and OpenAI, with the expectation that these companies will eventually generate revenue many times the size of those investments through cloud server rentals.

Anthropic is projected to spend upwards of $20 billion renting servers this year, triple last year’s spending, according to The Information. That projection was made in mid-December, before Anthropic’s revenue surged in the first quarter, suggesting the final figures could be higher.

OpenAI, another major AI player, is projected to spend around $45 billion on servers this year, up from approximately $17 billion last year, with much of that spending going to Microsoft, which has invested more than $13 billion in the ChatGPT maker.

While backlog figures represent future revenue rather than current earnings, they serve as a key metric for investors to assess the long-term health of cloud providers. The report indicates that the cloud industry’s major providers are becoming increasingly reliant on just two companies—Anthropic and OpenAI—for their future revenue growth.

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