CaliToday (24/10/2025): In a move that signals a massive escalation in the battle for AI supremacy, artificial intelligence giant Anthropic announced Thursday it is dramatically expanding its partnership with Google in a deal worth tens of billions of dollars.
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| Anthropic says it will expand use of Google Cloud computing, which says it is constantly ramping up performance of the internet giant's custom-designed Tensor Processing Units that power artificial intelligence in data centers (Manaure Quintero). |
The core of the arrangement involves Anthropic committing to purchase as many as one million of Google's custom-designed Tensor Processing Units (TPUs), specialized integrated circuits built to handle the intense demands of AI workloads.
This staggering investment in hardware is designed to secure the raw computing power Anthropic needs to compete directly with rivals like OpenAI. According to Krishna Rao, Anthropic's chief financial officer, the expansion will bring more than a gigawatt of new computing power online by the end of 2026.
This colossal power-up roughly equivalent to the output of a large nuclear power plant—is essential for Anthropic to meet the "exponentially growing demand" for its flagship Claude AI models from its base of over 300,000 business customers.
A Strategic Win for Google's Hardware
The deal is not just a lifeline for Anthropic; it's a monumental validation of Google's hardware ambitions. The AI industry has been overwhelmingly reliant on Nvidia's "keenly sought-after" GPUs, creating a market-wide bottleneck and soaring costs.
Google's TPUs are a direct competitor, and this massive order from a top-tier AI lab provides a powerful endorsement.
"Anthropic's choice to significantly expand its usage of TPUs reflects the strong price performance and efficiency its teams have seen with TPUs for several years," said Google Cloud chief Thomas Kurian. "We are continuing to innovate and drive further efficiencies and increased capacity of our TPUs."
Fueling the OpenAI Rivalry
The partnership deepens the complex, high-stakes rivalry dominating Silicon Valley. Anthropic was founded in early 2021 by former OpenAI researchers who famously split from the organization. They reportedly felt their employer, led by CEO Sam Altman, was not sufficiently focused on controlling the potentially harmful effects of its powerful models.
Backed by Amazon, Anthropic quickly became a key player in the "frantic race" that exploded after OpenAI released ChatGPT in November 2022.
While trailing OpenAI in sheer user numbers and name recognition, Anthropic has carved out a reputation for performance. Its new deal is set to fuel its latest model, Claude Sonnet 4.5, which the company launched last month with the bold claim that it is the "world's best" for computer programming. The new model is also touted as the most sophisticated for applications allowing an AI assistant to "use a computer as a human would."
This technological pursuit is reflected in sky-high valuations. While Anthropic is valued at an impressive $183 billion, its rival OpenAI has reportedly soared to a $500 billion valuation after a private share sale, making it the most valuable startup in the world.
With this new arsenal of Google TPUs, Anthropic is signaling it has the capital and the firepower to close that gap.
The company's ambitions are also stretching globally. Anthropic announced earlier this month that it will open an office in India next year, seeking inroads into the world's most populous country, which is projected to have more than 900 million internet users by year's end.