Microsoft, Nvidia invest in Anthropic in cloud services deal

Microsoft and Nvidia plan to invest in Anthropic under a new tie-up that includes a $30bn commitment by the Claude maker to use Microsoft’s cloud services, the latest high-profile deal binding together major players in the AI industry.

Nvidia will commit up to $10bn to Anthropic and Microsoft up to $5bn, the companies said on Tuesday, without sharing more details.

A person familiar with the matter said both the companies have committed to investing in Anthropic’s next funding round.

The announcement underscores the AI industry’s insatiable appetite for computing power as companies race to build systems that can rival or surpass human intelligence. It also ties major OpenAI-backer Microsoft, as well as key AI chip supplier Nvidia, closer to one of the ChatGPT maker’s biggest rivals.

“We’re increasingly going to be customers of each other. We will use Anthropic models, they will use our infrastructure and we’ll go to market together”, Microsoft CEO Satya Nadella said in a video. He added that OpenAI “remains a critical partner”.

The move comes weeks after OpenAI unveiled a sweeping restructuring that moved it further away from its non-profit roots, giving it greater operational and financial freedom.

The startup has since then announced a $38bn deal to buy cloud services from Amazon.com as it reduces reliance on Microsoft. Its CEO, Sam Altman, has said OpenAI is committed to spending $1.4 trillion to develop 30 gigawatts of computing resources – enough to roughly power 25 million US homes.

Still, three years after ChatGPT’s debut, investors are increasingly uneasy that the AI boom has outrun fundamentals. Some business leaders have noted that circular deals – in which one partner props up another’s revenue – add to the bubble risk.

“The main feature of the partnership is to reduce the AI economy’s reliance on OpenAI”, D A Davidson analyst Gil Luria said of Tuesday’s announcement.

“Microsoft has decided not to rely on one frontier model company. Nvidia is now assisting in expanding demand and was in a ways a little reliant on OpenAI’s success.

consolidation of the AI sector

Anthropic, which was founded in 2021 by former OpenAI employees, recently received a $ 183 billion valuation, making it a significant competitor to ChatGPT maker based on the high rate of enterprise customers who have embraced its services.

Anthropic’s annualized revenue run rate was predicted to exceed $ 26 billion in the next year, according to a report released by the Reuters news agency last month. More than 300,000 business and enterprise clients are present.

With Nvidia’s Grace Blackwell and Vera Rubin hardware, Anthropic will collaborate with Nvidia on chips and models to increase performance and commit up to 1 gigawatt of compute as part of Tuesday’s move. According to industry experts, one gigawatt of AI computing could cost between $20 billion and $25 billion.

The most recent Claude models will also be accessible to customers of Microsoft’s Azure AI Foundry, making them the only frontier models offered by all three of the top cloud providers.

According to eMarketer analyst Jacob Bourne, these investments show how the AI industry is reshaping itself around a few key players.