Microsoft and Nvidia Just Signed a Multibillion-Dollar Deal With Anthropic. Here’s What It Really Means for Investors. | The Motley Fool

Microsoft (MSFT +0.08%) and Nvidia (NVDA 0.11%) just announced a partnership with foundational large language model (LLM) maker Anthropic. As part of the deal, Anthropic has agreed to buy $30 billion of compute capacity from Microsoft’s cloud computing unit, Azure, and to commit to an additional 1 gigawatt of compute capacity. One gigawatt of compute capacity is presently valued with a cost around $50 billion, with $35 billion of that the cost of graphics processing units (GPUs).

In return, Microsoft will invest up to $10 billion in Anthropic, which now has a $350 billion valuation, while Nvidia will invest $5 billion. Anthropic will also work with Nvidia to optimize its artificial intelligence (AI) model designs for use with Nvidia’s future GPU architecture. The $350 billion valuation is a big jump from the $183 billion valuation Anthropic received in its prior funding round in September.

Anthropic already had investments from…