Circular AI vendor financing is back and back in a big way...
As we noted last fall, when we walked readers through the stunning math behind what we called the AI "circle jerk," this latest iteration centers on Amazon and Anthropic, with the left-leaning AI company now committing to spend more than $100 billion over the next decade on AWS infrastructure.
In the announcement on Monday evening, Anthropic committed to spending more than $100 billion over the next decade on AWS infrastructure, including multiple generations of Trainium chips and tens of millions of Graviton cores. Amazon plans to invest $5 billion in Anthropic and up to an additional $20 billion in the future.
"Anthropic's commitment to run its large language models on AWS Trainium for the next decade reflects the progress we've made together on custom silicon, as we continue delivering the technology and infrastructure our customers need to build with generative AI," Amazon CEO Andy Jassy said in a statement.
Anthropic's Claude Platform will be directly available in AWS accounts. Over 100,000 customers already run Claude models on AWS, and companies are continuing to collaborate on Project Rainier, a massive AI compute cluster built around nearly half a million Trainium2 chips.
The bigger message here is that both companies are locking in long-term deals for chips, cloud infrastructure, and AI deployment. Anthropic noted that it will bring nearly 1 gigawatt total of Trainium2 and Trainium3 capacity by year's end.
Anthropic noted that enterprise and developer demand for Claude has seen a "sharp rise" in usage, which has led to "inevitable strain" on its infrastructure, impacting reliability and performance. The company said the Amazon deal will quickly expand its available capacity.
"Our users tell us Claude is increasingly essential to how they work, and we need to build the infrastructure to keep pace with rapidly growing demand," Anthropic CEO Dario Amodei said in a statement. "Our collaboration with Amazon will allow us to continue advancing AI research while delivering Claude to our customers, including the more than 100,000 building on AWS."
We return to the circular AI vendor-financing scheme among a small cluster of firms, including Nvidia, AMD, Broadcom, Microsoft, Oracle, CoreWeave, and OpenAI, which we previously called a "circle jerk."
Now the pattern is reappearing in the Amazon-Anthropic deal.
Seperate but related, President Trump told CNBC earlier today that he had a meeting with Anthropic: "They came to the White House a few days ago, and we had some very good talks with them, and I think they're shaping up. They're very smart... I think we'll get along with them just fine."
Trump was referring to the fallout of the Pentagon and Anthropic around using AI models for warfare.