Google Bets $40 Billion on Anthropic

Google structures a $40 billion deal with Anthropic, tied to achievement milestones

Google parent Alphabet will invest up to $40 billion in Anthropic, with $10 billion arriving immediately in cash at a $350 billion valuation and the remaining $30 billion contingent on undisclosed performance targets. The investment is structured as a mix of cash and compute credits, expanding a partnership that previously totaled over $3 billion and roughly a 14% stake, Bloomberg reported.

The commitment makes Google by far the largest single investor in an AI company. The timing is notable: Amazon announced its own commitment of up to $25 billion in Anthropic just days earlier. Between the two hyperscalers, Anthropic now has up to $65 billion in committed capital from strategic partners, a figure that dwarfs the funding available to any other private AI company.

Anthropic confirmed the deal and disclosed that its run-rate revenue has surpassed $30 billion, up from $9 billion at the end of 2025.

That figure now exceeds OpenAI's $25 billion ARR, marking the first time Anthropic has led the industry in revenue.

Why Google is paying $40 billion to back a company it is also trying to compete with

The strategic tension at the center of this deal is unusual. Google is not simply backing a portfolio company. It is funding a direct competitor whose products are pulling developers and enterprise customers away from Google's own Gemini models.

Google co-founder Sergey Brin recently assembled a dedicated "strike team" within DeepMind to close the gap with Anthropic's coding capabilities, The Information reported. Brin wrote in an internal memo that Google must "urgently bridge the gap in agentic execution." The team is led by Sebastian Borgeaud, who previously ran Gemini pretraining.

Google's calculus appears straightforward: if Anthropic wins the model layer, Google still profits through cloud infrastructure and equity returns. If Gemini catches up, Google wins directly. The $40 billion is a hedge that pays off in either scenario, while ensuring Anthropic's compute runs on Google Cloud rather than shifting entirely to Amazon Web Services.

The deal signals that the AI funding era has not peaked. It has consolidated around fewer, larger bets, and the companies receiving those bets are no longer startups. They are the new infrastructure layer.