Anthropic has finalized a multi-gigawatt TPU compute deal with Google and Broadcom, with capacity set to go online from 2027. The contract's face value is staggering: the AI startup plans to spend $200 billion on Google Cloud over five years, representing more than 40% of Google's $460 billion-plus revenue backlog disclosed last week. Alphabet shares rose about 2% in after-hours trading on the news.
Google Cloud Seizes $200B Anthropic Order
According to The Information's exclusive report, the 5GW compute deal includes a five-year bill that significantly boosts Google's backlog. Amazon inked a $100 billion, 10-year contract with Anthropic in April, with Anthropic committing to about 2GW of Trainium compute. In the same quarter, OpenAI added $100 billion in AWS commitments (expanding from $38 billion to $138 billion), accounting for over 80% of AWS's backlog growth.
Two AI Startups Claim Half of Cloud Giants' Backlog
Combined, OpenAI and Anthropic contracts make up roughly half of the $2 trillion total revenue backlog across Amazon, Microsoft, Google, and Oracle. Core revenue commitments in AI infrastructure are now concentrated in two cash-burning startups. OpenAI expects server spending of about $45 billion this year (up from $17 billion last year); Anthropic anticipated over $20 billion in spending this year, but Q1 revenue surge may push the figure higher.
2029 Revenue Must Hit 20-30x 2025 Levels
These spending commitments rest on an audacious assumption: revenue in 2029 must be 20 to 30 times that of 2025, a growth rate achieved by very few software firms in history. The market is already pricing in this risk: Oracle shares have dropped roughly 45-50% since announcing a $300 billion contract with OpenAI last September, as investors fret over whether the spending will translate into actual revenue. Oracle's total debt surged 60% quarter-over-quarter to a record $153.1 billion.
Google has a structural buffer—it supplies Anthropic with its custom TPU chips, yielding higher margins than simply renting NVIDIA GPUs. Even if Anthropic under-delivers, Google's gross profit per dollar of compute contract remains higher than competitors. Still, when a single customer accounts for 40% of backlog, concentration risk looms large.