Anthropic Just Delivered Spectacular News For Amazon and Alphabet

It isn't quite David defeating Goliath, but Anthropic just did something few would have thought possible a few years ago.

The company is now the most valuable AI start-up in the world, surpassing OpenAI with its latest funding round. The owner of the Claude chatbot just closed its Series H round, valuing the company at $965 billion. Anthropic raised $65 billion from investors, including Samsung, Micron, and SK Hynix, the top memory chip companies, and venture capital firms like Altimeter Capital, Dragoneer, and Sequoia.

The news marks the latest step in a blistering hot run for Anthropic, whose valuation has now more than doubled from the $380 billion it stood at in February. Anthropic has also upended the software sector as its new Claude products and plug-ins compete directly with existing enterprise software products, showing how AI disruption in software could quickly become a reality.

Anthropic also unveiled its latest model in the funding announcement, Claude Opus 4.8, which outperforms all other publicly available AI platforms in a benchmark vibecoding test. Anthropic said its revenue reached a run rate of $47 billion this month, making its valuation based on a sales multiple seem reasonable compared to publicly traded software companies.

Anthropic is still privately held, so it's not easy for individual investors to invest in the company, though there are some indirect ways to get exposure.

However, the windfall from the funding round is great news for two of Anthropic's closest partners and biggest investors: Amazon (NASDAQ: AMZN) and Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL).

Image source: Getty Images.

The investor connection

Amazon and Alphabet were both early to invest in Anthropic, recognizing the company's potential and seeking a counterweight to Microsoft's partnership with OpenAI.

Amazon has invested $13 billion in Anthropic and has pledged to invest another $20 billion as Anthropic meets certain commercial milestones. Its stake before the latest funding round was valued at roughly $60 billion, and it may now be more than double that, making Amazon $60 billion richer, at least on paper.

Similarly, Alphabet said it would invest up to $40 billion in Anthropic last month, on top of at least $13 billion it invested in the company already. Alphabet at one point owned a 14% stake in Anthropic, and that investment could very well be worth more than $100 billion now.

Where the $65 billion is going

Anthropic plans to use the process to "expand its compute to meet growing demand for Claude, and scale the products and partnerships our customers rely on."

That should translate into the company plowing the $65 billion into cloud infrastructure services, including Amazon Web Services and Google Cloud. In recent weeks, Anthropic signed an agreement with Amazon for five gigawatts of new capacity, and with Google and Broadcom for five gigawatts of TPU capacity. It said that AWS remains its primary cloud provider and training partner.

Anthropic has previously pledged to spend $100 billion on Amazon Web Services over the next decade and $200 billion on Google Cloud over five years, which includes buying chips from those two companies.

Anthropic's soaring growth is also a major reason both Google Cloud and AWS have seen growth rates accelerate in recent quarters, and the new funding round should continue to fuel that growth.

A passing of the torch

OpenAI was valued at $852 billion in its most recent round, but that company has been falling short of growth targets and facing other challenges as Anthropic has sped past it.

The rivalry, however, is healthy for the AI boom and AI investors, and while Anthropic, Amazon, and Alphabet look like the biggest winners on this news, there should be plenty more.

Jeremy Bowman has positions in Amazon and Broadcom. The Motley Fool has positions in and recommends Alphabet, Amazon, and Broadcom. The Motley Fool has a disclosure policy.