Artificial intelligence firm Anthropic is reportedly set to spend around $200 billion with Alphabet’s Google Cloud over the next five years, a commitment that could significantly impact AI infrastructure spending if confirmed. This news, first reported by The Information, led to a 2% increase in Alphabet’s shares during extended trading. Although the figure remains unverified, the partnership is already poised to enhance Alphabet’s cloud capabilities, especially with Anthropic’s recent agreement to secure next-generation tensor processing units (TPUs) starting in 2027.
Alphabet’s Google Cloud is experiencing explosive growth, with revenue rising 63% year-over-year to $20 billion in Q1 2026, and operating income tripling to $6.6 billion. The reported commitment from Anthropic, which would represent over 40% of Alphabet’s cloud backlog, underscores the increasing demand for AI infrastructure and could further solidify Alphabet’s position in the market.
Investors should note that despite Alphabet’s recent stock surge, with shares up 30% in the past month, the company’s robust growth metrics and expanding TPU sales suggest it may still be undervalued at around 30 times earnings.
Source: fool.com