SANTA CLARA, California: Advanced Micro Devices will supply Anthropic with tens of billions of dollars' worth of artificial intelligence servers and invest up to US$5 billion in the startup, expanding its presence in the fast-growing AI infrastructure market as it seeks to challenge industry leader Nvidia.

Announced on July 22, the agreement is the latest example of AI chipmakers investing in companies that are also among their biggest customers. Nvidia has separately been in talks to invest $30 billion in ChatGPT maker OpenAI.

Under the deal, Anthropic will purchase up to two gigawatts of AMD's next-generation Instinct MI450 chips, with deliveries beginning in the first half of 2027. AMD's investment in the Claude developer will be tied to the achievement of certain deployment milestones.

AMD executives have said that one gigawatt of computing power, enough to supply roughly 750,000 U.S. homes, can cost double-digit billions of dollars.

The agreement gives Anthropic additional computing capacity as demand for its AI services continues to grow. The company has emerged as one of Silicon Valley's leading AI firms, driven by strong adoption of enterprise products such as Claude Code.

"Access to compute is central to keeping Claude at the frontier and meeting demand from our customers," Tom Brown, Anthropic's co-founder and head of compute, said on Wednesday.

Anthropic has been expanding its computing resources in recent months to ease capacity constraints. In May, it agreed to lease the full computing capacity of SpaceX's Colossus 1 facility in Memphis, which houses more than 220,000 Nvidia processors and provides the company with an additional 300 megawatts of computing capacity.

Meta Platforms is also in discussions to lease computing power to Anthropic in a potential agreement worth up to $10 billion over two years, a source familiar with the matter told Reuters last week.

According to the Wall Street Journal, which first reported the latest deal, Anthropic will deploy some of the AMD chips in its own data centers while leasing additional capacity through cloud providers and emerging AI cloud companies. The report also said AMD had been in talks to provide a financial backstop for Anthropic's future data-center leases.

AMD has been pursuing similar partnerships to expand demand for its AI chips. In October, the company announced a multi-year agreement with OpenAI that could generate tens of billions of dollars in annual revenue while giving the ChatGPT creator the option to acquire up to roughly 10 percent of the chipmaker.

Shares of AMD rose 0.5 percent in early trading on July 22 and have more than doubled in value so far this year.