AMD to Invest $5 Billion in Anthropic, Signs Multi-Billion Dollar AI Chip Orders, Striking at Heart of Nvidia’s Monopoly

TradingKey - On July 22, Eastern Time, according to The Wall Street Journal, Advanced Micro Devices ( AMD) has signed a multi-billion-dollar AI server partnership agreement with AI company Anthropic. Under the terms of the agreement, Anthropic will purchase up to 2 gigawatts of AMD's latest-generation AI chip, the Instinct MI450, for its data centers starting in the first half of 2027, and can rent partial computing power through other major cloud service providers or new cloud vendors.

The agreement includes an important clause: AMD will invest up to $5 billion in Anthropic upon reaching certain computing power deployment milestones, marking AMD's first investment in an AI company.

AMD has long been in the shadow of Nvidia ( NVDA) in the AI chip field. Nvidia's GPUs have long dominated the training market for large AI models, and leading AI companies like OpenAI and Anthropic rely on Nvidia as their primary source of computing power. By combining chip supply with capital investment, AMD has become one of Anthropic's chip suppliers, meaning AMD has opened up a key gap in the high-end AI training chip market.

For Anthropic, the value of the agreement lies not only in chip procurement but also in AMD's capital injection. Anthropic is progressing with its IPO process, with a target valuation of $965 billion, having previously confidentially filed for its IPO. AMD's investment will provide financial support for its infrastructure expansion while boosting confidence in its IPO valuation.

AMD CEO Lisa Su stated that the company has always wanted to be a key partner for Anthropic's infrastructure, and the engineering teams of both companies have been working together for some time.

The timing of the agreement is noteworthy. Anthropic plans to begin deploying the MI450 in the first half of 2027, which means AMD's chips must complete mass production and performance validation before then. If AMD's chips can meet Anthropic's training requirements by that time, it will serve as a positive validation of AMD's technology roadmap.

However, AMD's challenges in the AI training chip market remain. Nvidia has a huge advantage in terms of software ecosystem and developer community. Whether Anthropic's order can translate into a long-term partnership depends on the actual performance of the MI450 and AMD's responsiveness to customer needs.

As of press time, AMD's pre-market stock decline narrowed to 2.69%, trading at around $530. The contribution of this deal to AMD's revenue will not begin to materialize until 2027 at the earliest.

[Source: Futu]