The AI funding frenzy continues, with Google planning to invest $10 billion in Anthropic at a $350 billion valuation, deepening its relationship with the San Francisco-based AI company best known for building Claude.

Bloomberg reports that Google's deal with Anthropic includes an initial $10 billion investment at a $350 billion valuation, with the potential for another $30 billion if certain performance milestones are achieved. That would bring the potential deal size to as much as $40 billion.

Part of the deal includes Google Cloud providing 5 gigawatts of computing capacity to the AI startup, founded in 2021 by former OpenAI employees, including Dario Amodei and Daniela Amodei, over the next five years. Additional capacity could follow.

Earlier this week, Amazon committed another $5 billion to Anthropic at the same valuation, with the option to invest an additional $20 billion over time.

Amazon's scramble for compute was detailed earlier in a deal with Meta:

Bloomberg pointed out that the Google-Anthropic deal is an "expansion of an agreement announced earlier this month between Anthropic, Google, and Broadcom."

For Google, the agreement with Anthropic strengthens demand for its cloud services and in-house TPU chips, which have become viable alternatives to Nvidia's AI chip stack.

Earlier this week, Google unveiled two new chips for the agentic era, including the TPU 8t, designed for training AI models, and the TPU 8i, designed for inference, or running AI services once they are developed and deployed. Again, this is all positioned to take on Nvidia.

There has been increased scrutiny around "circular" AI financing since we broke down the math and called it an epic "circle jerk" last fall.