Anthropic in talks to raise $30b at $900b valuation

Anthropic is in early talks to raise at least US$30 billion from investors at a valuation above US$900 billion excluding the new money, with the round possibly closing by the end of May, according to people familiar with the matter.

The deal is not final and no term sheet has been signed, and Anthropic is seeking more funding as it spends heavily on computing infrastructure to meet demand for its AI products and weighs an IPO as soon as October.

Google committed US$10 billion and may invest up to US$30 billion more, while Amazon agreed to invest US$5 billion with plans to add up to US$20 billion more, all at a US$350 billion valuation.

🔗 Source: Bloomberg

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Implications, context, and why it matters.

Anthropic’s fundraising rests on long-term infrastructure deals

Anthropic needs fresh money because it has taken on huge, multi-year commitments to lock in future computing power.
It has agreed to spend more than US$100 billion on Amazon Web Services (AWS), Amazon’s cloud computing division, over the next decade. In return, Anthropic can secure up to five gigawatts of compute capacity 1.
It also committed US$200 billion to Google Cloud, Google’s cloud computing business, over five years under a recent agreement 2.
Much of that capacity is still to come. In the AWS deal, a large share of the contracted compute will be built over the next several years 3.

Big tech backers are booking large paper gains on Anthropic stakes

Amazon and Google have seen the value of their Anthropic holdings rise, creating large unrealized gains.
Amazon said first-quarter net income “includes pre-tax gains of US$16.8 billion included in non-operating income from our investments in Anthropic.” That was more than half of Amazon’s pre-tax income for the quarter 4.
When Anthropic raises money at a higher valuation, companies such as Amazon and Google can mark up the value of the shares they already own 4.
That accounting boost ties together cloud deals with equity stakes. Public-market investors may examine that link closely in any future AI initial public offering (IPO) 5.