Anthropic signs US$35bil computing deal with startup backed by Nvidia

Anthropic, the San Francisco-based AI lab, has inked a US$35 billion deal for access to cloud computing power from a US-based startup, Lambda, which is backed by Nvidia. This agreement complements a series of such deals Anthropic has made in recent times, reflecting the intense competition for advanced computing power in the AI industry.

Lambda will secure access to a data center being constructed by another company, Hut 8, which specializes in bitcoin mining and data center construction. Hut 8, based in San Jose, California, is constructing a data center, of which Anthropic will be among the first users.

Nvidia, a significant player in the industry, will lease the data center from Hut 8. In return, Lambda will pay Nvidia an undisclosed amount to gain access to the data center. This transaction echoes a similar six-year-long agreement Anthropic recently signed with Nscale, a London-based cloud provider, for a US$45 billion deal.

Anthropic's investment in computing power is part of a broader trend in the AI sector, where companies are vying for advanced computing power to fuel the development of their AI models. The race is on, with rivals OpenAI also pursuing similar objectives. Both Anthropic and OpenAI are strategizing for potential IPOs, driven by the surge in demand for chips and advanced computing power.

This demand has ripple effects on global supply chains, including those of consumer electronics, leading to increased costs. Apple, for instance, has raised prices for some of its devices due to memory and chip costs, and is expected to raise prices for its latest generation of iPhones during a September event.