Anthropic Inks Deal with Microsoft and Nvidia, Secures $30B in Azure Capacity

Microsoft (MSFT) unveiled significant strategic alliances with Nvidia (NVDA) and AI firm Anthropic on Tuesday, signaling a potential shift in its AI strategy and a move to diversify beyond its existing heavy reliance on OpenAI.

The agreements involve a substantial $5 billion investment from Microsoft into Anthropic, complemented by Nvidia’s $10 billion stake in the AI startup. Crucially, Anthropic has committed to a massive $30 billion purchase of Azure compute capacity from Microsoft, alongside securing contracts for additional compute capacity reaching up to one gigawatt, according to a Microsoft corporate blog post. These commitments underscore the escalating infrastructure demands driven by advanced AI model training and deployment.

“This is a dream come true for us,” remarked Nvidia CEO Jensen Huang in a released statement. “We’ve admired Anthropic’s work for a long time, and this represents a deep partnership to accelerate Claude.” Huang is referencing Anthropic’s flagship AI model which competes directly with OpenAI’s GPT series.

Nvidia and Anthropic’s formal collaboration marks a pivotal moment in their relationship, aiming to bolster Anthropic’s future expansion, according to the blog post. The companies will engage in collaborative engineering and design efforts to optimize Anthropic’s AI models for peak performance and efficiency on Nvidia’s hardware. Simultaneously, they will tailor Nvidia’s hardware architectures to specifically address Anthropic’s unique computational workloads. This co-design approach is critical for maximizing the throughput and minimizing the latency required for running large language models (LLMs) like Claude.

The companies stated that Anthropic’s initial compute commitment will harness up to one gigawatt of compute capacity utilizing Nvidia’s cutting-edge Vera Rubin and Grace Blackwell systems. These advanced systems leverage Nvidia’s GPUs and CPUs respectively, offering significantly improved performance and scalability for AI training and inference.

Microsoft’s previous multi-billion dollar investment in OpenAI has positioned it as a major player in the AI landscape since 2019. OpenAI, initially established as a non-profit research laboratory in 2015, has evolved into one of the fastest-growing commercial entities globally, propelled by the rapid adoption of its ChatGPT chatbot. The partnership has been instrumental in accelerating the development and deployment of AI technologies, but concerns around concentration of power may have encouraged Microsoft’s desire to diversify its AI partnerships.

Last month, OpenAI finalized a recapitalization, solidifying Microsoft’s role in the startup. Microsoft now holds a significant stake in OpenAI’s for-profit entity, estimated at $135 billion, representing approximately 27% of the company on an as-converted diluted basis. This strategic investment has allowed Microsoft to integrate OpenAI’s AI models into its own products and services, enhancing its competitiveness in various markets.