AMD strikes chip supply deal with Anthropic, plans up to $5bn investment

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AMD and Anthropic chip deal

Highlights

Anthropic commits to buy tens of billions of dollars of AMD AI server chips, with AMD planning up to $5 billion investment contingent on milestones.
The partnership adds 2 gigawatts of computing capacity to Anthropic's platform, with the first gigawatt operational by the first half of next year.
AMD shares have risen over 140% in 2024, driven by surging demand for AI hardware as semiconductor shortages intensify and sector investment accelerates.

Chip supply pact expands compute capacity

As first reported by Financial Times, citing The Wall Street Journal, the agreement ties Anthropic’s chip purchases to AMD’s broader investment in the AI company and expands the semiconductor group’s role in the fast-growing market for AI infrastructure.

The transaction includes Anthropic committing to buy tens of billions of dollars of AMD’s latest AI server chips. AMD, which announces the deal on Wednesday, says its investment of up to $5 billion in Anthropic depends on certain milestones being met.

The partnership is set to add 2 gigawatts of computing capacity to Anthropic’s platform, with the first gigawatt due to come online in the first half of next year. Tom Brown, co-founder and chief compute officer at Anthropic, says access to compute is central to keeping Claude at the frontier and meeting customer demand.

AMD’s processors are becoming part of Anthropic’s widening mix of AI infrastructure, which already includes chips from Nvidia, Amazon and Google. The deal also reflects a broader pattern in which frontier AI companies and chipmakers are linking supply contracts with direct investments.

AI infrastructure race drives sector spending

AI companies are racing to secure computing capacity as a semiconductor shortage pushes up demand and supports chip stocks. AMD shares are up more than 140% so far this year, underscoring investor expectations that demand for AI hardware remains strong.

Anthropic has already struck several major computing agreements this year, including deals with Google, Broadcom and Amazon Web Services, giving the San Francisco-based company access to more than 10 gigawatts of new capacity. In May, it also agrees to pay Elon Musk’s SpaceX $1.25 billion a month to lease data centre space.

The wider market is showing similar momentum. OpenAI announces on Wednesday that it has secured 3.2 gigawatts of power for a new data centre facility in the U.S. state of Georgia, in a project scheduled to come online between 2028 and 2032 and worth tens of billions of dollars.

The latest agreement also marks a shift for Anthropic chief Dario Amodei, who late last year criticizes competitors for spending aggressively to secure computing supply ahead of demand. The new pact suggests the pressure to lock in capacity is intensifying across the sector.

In our earlier article on AMD’s Helios rack-scale AI platform and Microsoft’s planned Azure deployment, we noted that the rollout strengthened AMD’s position in hyperscale data centers and was a key driver of bullish sentiment around the stock. We also highlighted that, despite strong momentum, near-term price action could turn range-bound as markets wait for sustained demand from major cloud partners to validate the growth story.

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