Anthropic Strikes Staggering $11.6 Billion Cloud Deal with Akamai

Anthropic, a leading AI company, has committed to spending an unprecedented $11.6 billion over seven years on Akamai’s cloud infrastructure. This massive deal, confirmed by Akamai on Thursday, significantly surpasses a previously reported $1.8 billion agreement between the two entities, making it the largest in Akamai’s history. The commitment, however, is not absolute; it is contingent upon Akamai fulfilling specific delivery and service-availability requirements. Furthermore, either company retains the right to terminate the agreement under certain stipulated conditions.

This landmark partnership underscores Anthropic's continuous and substantial investment in compute resources for its AI operations. Uniquely, the deal also highlights a growing emphasis on a less-publicized aspect of AI infrastructure: Central Processing Units (CPUs). While specific applications for Anthropic’s use of these general-purpose chips were not disclosed by Akamai, the increasing demand for CPUs is attributed to AI agents undertaking a broader range of tasks that require their versatile processing capabilities.

Financially, Akamai anticipates significant future revenue from this agreement, though no revenue is expected this year. Executives project earnings of $150 million to $300 million in 2027, with revenue accelerating to an annual pace of approximately $1.7 billion by the end of 2028. To accommodate this expansion, Akamai plans to invest around $5.5 billion in building out the necessary capacity. Additionally, the company is allocating an extra $1.7 billion to its capital spending for the current year, primarily for advance purchases of crucial components like memory.

A notable element of the deal is Akamai's issuance of a warrant to Anthropic. This warrant grants Anthropic the right to acquire nonvoting preferred stock, convertible into 7.7 million common shares—potentially up to 5% of Akamai’s outstanding stock—at a price of $111.33 per share. The vesting structure of this warrant is tied to Anthropic’s spending: roughly 2% is expected to vest upon the first payment, with an additional 1% becoming available for every $3 billion in cloud services Anthropic commits to Akamai. This incentive could potentially expand the total deal value by as much as $9 billion, bringing the cumulative commitment to approximately $20 billion.

This particular warrant structure, where a supplier provides its customer with a potential equity stake that grows with their spending, is a strategic departure from the more common model in AI-related deals, where suppliers like chipmakers or cloud providers directly invest in the AI labs they supply. AMD employed a similar approach with OpenAI last year, linking warrants to chip-purchase milestones. Anthropic itself is familiar with such arrangements, having previously secured investments or agreements from major players like Amazon, Google, Microsoft, and AMD, who also supply it with chips or cloud capacity. Following the announcement, Akamai’s shares experienced a significant boost, rising as much as 17% in after-hours trading.