Google is pouring up to $40 billion into Anthropic, marking one of the largest investments in the AI startup yet. The search giant is committing $10 billion immediately at Anthropic's current valuation, with an additional $30 billion on the table if the company hits specific performance milestones. This comes after Anthropic signed a joint agreement with Google and Broadcom for "multiple gigawatts of next-generation TPU capacity."

The deal cements a deeply intertwined relationship between the two companies. Anthropic will gain access to Google's tensor processing units and servers, with the search giant agreeing to provide 5 gigawatts of computing capacity in 2027. The structure mirrors a deal Anthropic struck with Amazon earlier this year — $5 billion now plus up to $20 billion in milestone payments in exchange for using Amazon's Trainium chips.

These arrangements highlight a growing pattern in the AI industry: circular deals where tech giants invest in startups that then spend that capital on their hardware. Anthropic recently raised $30 billion in its latest funding round, demonstrating the massive capital requirements of building competitive AI models. The company now finds itself locked into using chips and servers from both Google and Amazon while receiving investment from both — a relationship that blurs the line between competitor and partner.