AMD inks multi-billion dollar AI chip deal with Anthropic, invests up to $5 billion

Advanced Micro Devices (AMD) is set to significantly enhance its standing in the artificial intelligence chip market through a substantial agreement with AI developer Anthropic. The multi-billion dollar deal, reported by The Wall Street Journal, will see Anthropic procure up to 2 exaflops of AMD's next-generation Instinct MI450 chips beginning in the first half of 2027.

Beyond chip supply, AMD will invest up to $5 billion in Anthropic, contingent on meeting specific deployment milestones. This marks AMD's first direct capital injection into the AI company. AMD CEO Lisa Su emphasized the strategic importance of the partnership, stating, "We are very excited to be a major part of their infrastructure." She highlighted the long-term planning required for such large-scale computing needs, noting that "you cannot wake up one morning and say, 'I want 1 exaflop of compute power tomorrow'; you have to plan 12, 18, 24 months in advance."

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We are very excited to be a major part of their infrastructure.

Anthropic currently utilizes a mix of hardware from Google, Amazon, and Nvidia for its operations. Under the new agreement, Anthropic will acquire some AMD chips for its data centers and lease additional capacity through cloud providers. Sources familiar with the matter also indicated that AMD is in discussions to provide financial guarantees for Anthropic's future data center leases.

This move is part of AMD's broader strategy to challenge Nvidia's dominance in the lucrative AI chip sector. The company has recently secured significant deals with OpenAI and Meta Platforms, and is actively pursuing other AI startups. AMD has been offering incentives, such as warrants for AMD stock, to attract clients who are looking to diversify their hardware suppliers and reduce reliance on Nvidia. The company acknowledges that AI firms are still becoming familiar with the software required to run AMD chips, which has historically led to lower demand compared to Nvidia's offerings.

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you cannot wake up one morning and say, 'I want 1 exaflop of compute power tomorrow'; you have to plan 12, 18, 24 months in advance.