Anthropic has agreed to spend $11.6 billion on Akamai's cloud services over the next seven years.
Anthropic, an artificial intelligence company, has entered into a significant agreement with Akamai Technologies to utilize Akamai's cloud infrastructure. The deal, valued at $11.6 billion over seven years, marks the largest in Akamai's history. This commitment is contingent upon Akamai meeting specific delivery and service availability standards, with provisions allowing either party to terminate under certain conditions.
The agreement underscores Anthropic's substantial investment in cloud computing resources, particularly in CPU-based infrastructure. While the specific applications for these resources were not disclosed, the move reflects a growing trend of AI companies expanding their computational capabilities to support advanced AI models and services.
Financially, Akamai anticipates recognizing revenue from this deal starting in the latter half of 2027, with projections of $150 million to $300 million in that year. By the end of 2028, the annual revenue from this agreement is expected to reach approximately $1.7 billion. To accommodate this expansion, Akamai plans to invest around $5.5 billion in building out the necessary capacity and an additional $1.7 billion this year to procure essential components like memory in advance.
An innovative aspect of this deal is the issuance of a warrant by Akamai to Anthropic. This warrant grants Anthropic the right to purchase up to 7.7 million shares of Akamai's non-voting preferred stock, convertible into common shares, at a price of $111.33 per share. This arrangement could potentially grant Anthropic up to a 5% stake in Akamai, with vesting tied to Anthropic's spending milestones. Specifically, an initial 2% stake vests upon Anthropic's first payment, with additional increments of approximately 1% for every $3 billion spent, allowing the total deal value to potentially increase to about $20 billion.
This structure represents a departure from traditional investment patterns in the AI sector, where suppliers often invest directly in AI companies. Instead, Akamai is offering its customer, Anthropic, a growing stake in its own company, aligning their interests as Anthropic's investment in Akamai's services increases.
Anthropic has previously engaged in similar arrangements with major tech companies, including Amazon, Google, Microsoft, and AMD, involving investments and agreements for chips or cloud capacity. This latest deal with Akamai further solidifies Anthropic's strategy of forming strategic partnerships to bolster its infrastructure and computational resources.
Following the announcement, Akamai's shares experienced a significant uptick, rising as much as 17% in after-hours trading, indicating positive investor sentiment regarding the deal's potential impact on Akamai's future growth and revenue streams.