News broke earlier this week that artificial intelligence (AI) specialist Anthropic has reportedly committed to spend roughly $200 billion with Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google Cloud over five years -- a staggering figure that, if accurate, could meaningfully shift the balance in AI infrastructure spending. The Information first reported the number on Tuesday. Shares of the search g...
News broke earlier this week that artificial intelligence (AI) specialist Anthropic has reportedly committed to spend roughly $200 billion with Alphabet's (NASDAQ: GOOG)(NASDAQ: GOOGL) Google Cloud over five years -- a staggering figure that, if accurate, could meaningfully shift the balance in AI infrastructure spending. The Information first reported the number on Tuesday. Shares of the search giant climbed about 2% in extended trading following the report. But before we dig into the implications, note that there's a catch: neither company has confirmed the $200 billion figure. Regardless, there is a very real capacity build-out going on, with or without this commitment -- and it has huge implications for Alphabet stock. Will AI create the world's first trillionaire? Our team just released a report on a little-known company, called an "Indispensable Monopoly," providing the critical technology Nvidia and Intel both need. Continue » Image source: Getty Images. What's actually confirmed In early April, Anthropic officially announced a new agreement with Google and chip-design specialist Broadcom for multiple gigawatts of next-generation tensor processing unit (TPU) capacity that's expected to start coming online in 2027. TPUs are Google's custom-built AI accelerators, and they have emerged as a credible alternative to Nvidia's graphics processing units (GPUs) for both AI model training and the inference work that runs models in production. What's new this week is the reported size of Anthropic's commitment behind that capacity. According to The Information, the AI specialist plans to spend about $200 billion with Google over five years, beginning in 2027. If that number holds up, it would account for more than 40% of the cloud backlog Alphabet disclosed in its most recent quarterly results. Even setting aside the headline figure, the official April announcement gave investors plenty to chew on. Anthropic disclosed that its run rate revenue had crossed $30 billion --...