As part of the deal, Anthropic has pledged to spend over $100 billion on Amazon Web Services (AWS) technologies over the next decade. This includes both current and future generations of Trainium, Amazon's custom AI chips. The company has also secured up to five gigawatts of capacity for training and deploying its Claude AI models.

The investment from Amazon will be divided into an immediate $5 billion injection into Anthropic and a potential future investment of up to $20 billion, contingent on "certain commercial milestones." This is in line with Anthropic's latest valuation of $380 billion. The company has also said that it expects to bring nearly one gigawatt of Trainium2 and Trainium3 capacity online by the end of this year.

Amazon has said it expects to spend around $200 billion this year on capital expenditures, mostly on AI infrastructure. The investment comes just two months after Amazon also announced a potential $50 billion investment in OpenAI, Anthropic's main competitor. Both companies are trying to prove their market positions ahead of possible IPOs later this year.

Anthropic has acknowledged a "sharp rise" in consumer usage and enterprise demand for Claude, its AI model. This has led to an "inevitable strain" on its infrastructure, affecting reliability and performance. However, the company is optimistic that its new agreement with Amazon will help quickly expand available capacity to meet the growing demand from users.

Amazon to invest $25B in Anthropic