Alphabet Inc. to invest up to $40 billion in Anthropic, with an initial $10 billion in cash for computing capacity expansion

Alphabet Inc. and Anthropic announced the investment agreement on Friday. The initial $10 billion will fund a computing capacity expansion initiative, with the remaining amount contingent on meeting certain performance targets.

This builds on an earlier announcement by Anthropic about signing a deal with Broadcom and Google for multiple gigawatts of computing capacity, anticipated to come online from next year.

Following the news, Needham and Jefferies reiterated Buy ratings on Alphabet Inc., with price targets of $400. As of April 24, the stock carries an average share price upside potential of 13%.