Key Takeaways
- Advanced Micro Devices (AMD) will sell Anthropic tens of billions in AI servers.
- The deal includes an investment of up to $5bn from AMD into the startup.
- This partnership aims to strengthen AMD's presence in a market dominated by Nvidia.
Advanced Micro Devices (AMD) has announced a significant deal with Anthropic, a leading AI firm based in Santa Clara, California. Under this agreement, AMD will supply Anthropic with tens of billions of dollars' worth of AI servers and invest up to $5bn into the company. This move is part of an ongoing trend in the tech industry where chipmakers invest in AI firms that are among their biggest customers.
The announcement was made on Wednesday, marking a strategic partnership that will bolster AMD's position in the competitive AI market, currently dominated by Nvidia. According to sources, this deal is similar to other so-called 'circular deals' seen in the industry, where chipmakers provide financial support and resources to AI firms, which are also significant buyers of their products.
Tom Brown, co-founder and compute head at Anthropic, emphasized the importance of access to computing capacity for maintaining competitive edge. He stated, 'Access to compute is central to keeping Claude at the frontier and meeting demand from our customers.' This highlights the critical role that computational power plays in the development and deployment of AI technologies.
AMD's investment in Anthropic will be tied to achieving certain deployment milestones. The company has previously announced a multi-year deal with OpenAI, which brought in tens of billions of dollars in annual revenue while giving ChatGPT creator the option to buy up to roughly 10% of AMD. This latest agreement further underscores AMD’s commitment to supporting AI innovation.
Anthropic's need for computing capacity is evident from its recent aggressive moves to overcome capacity constraints. In May, it agreed to rent the full computing power of SpaceX’s Colossus 1 facility in Memphis, which houses over 220,000 Nvidia processors and provides 300 megawatts of new capacity. Additionally, Meta Platforms is reportedly in talks with Anthropic for a potential deal worth up to $10bn over two years.
Under the latest deal, Anthropic will use some of the AMD chips at its own data centres and lease additional capacity through cloud providers and new AI cloud companies, according to The Wall Street Journal. This move is expected to provide Anthropic with the necessary computing power to meet growing demand from its customers while also ensuring a steady supply chain for AMD.
AMD executives have stated that 1 gigawatt of computing power can cost double-digit billions of dollars. Shares of AMD ticked up 0.5% in early trading, reflecting investor interest in this strategic partnership. The stock has more than doubled in value so far this year, indicating strong market sentiment towards the company’s growth prospects.
'Access to compute is central to keeping Claude at the frontier and meeting demand from our customers,'
Tom Brown, Co-founder and Compute Head at Anthropic
