The race to dominate artificial intelligence just became even more expensive. Microsoft and Nvidia announced on Tuesday that they plan to invest heavily in Anthropic, the startup behind the Claude chatbot. As part of the agreement, Anthropic committed to spending $30 billion on Microsoft’s cloud computing services over the coming years.
This deal binds two of the most powerful tech giants closer to ChatGPT’s fiercest rival. According to the companies, Nvidia will commit up to $10 billion, while Microsoft plans to invest up to $5 billion. They did not share specific dates for when the money will change hands, but the sheer size of the numbers highlights the industry’s desperate need for computing power.
Building AI that rivals human intelligence requires massive amounts of energy and specialized chips. This partnership ensures Anthropic gets the infrastructure it needs to compete. “We’re very excited to get additional capacity that we can use both to train our models to support Microsoft first-party products and to sell together,” Anthropic CEO Dario Amodei explained in a video statement.
The move creates an interesting dynamic for Microsoft. The tech giant is already the primary backer of OpenAI, yet this deal sees them funding the competition. It comes just weeks after OpenAI announced its own $38 billion deal to buy cloud services from Amazon. OpenAI CEO Sam Altman has aggressive plans of his own, recently stating he intends to spend over $1 trillion to develop enough computing resources to power millions of homes.
However, the massive spending is starting to worry some parts of Wall Street. Three years into the AI boom, investors are questioning whether the actual business results match the hype. Critics argue that “circular deals”—in which a tech giant invests in a startup and the startup immediately returns that money to pay for cloud hosting—artificially inflate revenue numbers.
Some prominent investors are already hitting the exit button. Peter Thiel’s hedge fund recently sold its entire stake in Nvidia. SoftBank CEO Masayoshi Son also sold his Nvidia holdings, though he quickly moved that capital into a massive bet on OpenAI. As the checks get bigger, the market is watching closely to see if this is sustainable growth or a bursting bubble.
