Anthropic PBC, a prominent artificial intelligence company, is reportedly in advanced discussions with Alphabet Inc.’s Google regarding a substantial deal to secure additional computing power. This unfinalized plan is valued in the high tens of billions of dollars and involves Google furnishing cloud computing services to Anthropic, according to sources familiar with the private matter.

A critical component of this potential agreement is Anthropic's access to Google’s tensor processing units, or TPUs. These are custom-designed chips developed by Google specifically to accelerate machine learning workloads, a vital resource for cutting-edge AI development. Google has a pre-existing relationship with Anthropic, having served as both an investor and a cloud provider in the past. Both Anthropic and Google have declined to comment on the ongoing discussions, which are still in their early stages and subject to change.

The market reacted swiftly to the news, with Google shares experiencing a jump of over 3.5% in extended trading. Conversely, Amazon.com Inc., which also holds an investment in Anthropic and acts as a cloud provider, saw its shares slip by approximately 2%.

Established in 2021 by former employees of OpenAI, San Francisco-based Anthropic is widely recognized for its Claude family of large language models. These models are direct competitors to OpenAI’s own GPT models in the rapidly evolving AI landscape. Like its industry peers, Anthropic has been aggressively raising substantial capital to maintain its competitive edge in the AI race, which industry leaders emphasize requires immense resources for continuous research, breakthroughs, and to meet burgeoning consumer demand.

Anthropic recently engaged in preliminary funding discussions with Abu Dhabi-based investment firm MGX. This followed closely on the heels of closing a massive $13 billion funding round, which took place approximately a month prior. That significant financing round, led by Iconiq Capital with Fidelity Management and Research Co. and Lightspeed Venture Partners as co-leads, nearly tripled Anthropic’s valuation to an impressive $183 billion, inclusive of all funds raised to date.

Highlighting their previous commitments, Google had previously invested around $3 billion in Anthropic. This included a $2 billion investment commitment in 2023, followed by an additional $1 billion investment earlier this year. Similarly, Amazon has committed approximately $8 billion in Anthropic, underscoring Anthropic's status as a key AI customer for Amazon Web Services and a major consumer of Amazon’s custom AI chips.