Should You Buy Alphabet Stock After Anthropic Raised Its Google Commitment to $121 Billion? - The Motley Fool
By Google News AI ·
Anthropic, the artificial intelligence (AI) company behind Claude, updated its initial public offering (IPO) filing on Monday, Nov. 2, adding its third-quarter results. On Sept. 30, it had $95.6 billion in cash and cash equivalents and $36.3 billion in short-term investments -- around $132 billion combined, near its total at the end of June.
Against this, Anthropic has signed purchase commitments and leases worth about $895.4 billion, almost all for compute and infrastructure. The first filing, on Oct. 26, left that figure blank.
And one of the largest parts goes to Alphabet (GOOGL +0.37%)(GOOG +0.08%). Anthropic now says it committed to spend at least about $121.3 billion with Google between April 2026 and July 2033, no matter how much it uses. Last week's filing had that number at about $114.5 billion.
With Alphabet shares near $283 as I write, is this durable revenue for Google Cloud, or a bet on a customer that lost money from operations last quarter? I think it's mainly the former over the next couple of years.
Google Cloud's revenue backlog (contracted revenue not yet recognized) hit $560.8 billion on Sept. 30. Three months earlier, it stood at $513.9 billion. And a year before, Alphabet's total backlog, mainly Google Cloud, was just $157.7 billion, under an older count that left out contracts for a year or less. But growth has slowed lately, with around $47 billion added in the third quarter versus almost $52 billion in the second.
Anthropic's $121.3 billion minimum equals around 22% of that cloud backlog. Alphabet doesn't say how much of the number comes from Anthropic, and some of the minimum has probably been spent since April. But it's a big share tied to one customer.
Spread across a bit more than seven years, the minimum averages around $16.5 billion…
Originally published by Google News AI