Advanced Micro Devices Inc. has agreed to invest up to $5 billion in Anthropic PBC as part of a potential multi-gigawatt deployment of chips for the artificial intelligence startup, deepening ties between the two firms and aiding the Claude maker’s push to meet surging AI demand.

Under terms of the agreement announced Wednesday, Anthropic will buy as much as 2 gigawatts of AMD’s latest-generation chips, called the Instinct MI450, beginning in the first half of 2027. A single gigawatt is enough to power up to 750,000 US homes at any given time.

The deal is poised to help bolster AMD in competing against industry leader Nvidia Corp. and provide Anthropic with essential computing power. The AI developer has previously inked an agreement with Elon Musk’s SpaceXAI and held talks with Meta Platforms Inc. to shore up its computing resources.

“This collaboration brings together Anthropic’s leadership in frontier AI with the full strength of AMD high-performance computing,” AMD Chief Executive Lisa Su said in a statement. “Together, we will accelerate AI adoption.”

The Wall Street Journal was first to report the deal.

Over the past year, top AI developers like Anthropic and OpenAI have struck a series of arrangements with chipmakers and cloud computing providers that have been criticized as being circular in nature. The tech industry has argued these deals are necessary to support an unprecedented build-out of physical infrastructure to train and run AI models.

In October, OpenAI announced that it would deploy 6 gigawatts worth of AMD graphics processing units over multiple years and set the stage for the AI startup to acquire a large stake in the chipmaker. OpenAI separately has raised billions of dollars from Nvidia and relies heavily on its hardware.

Anthropic also counts Nvidia as a large investor and supplier.

The startup raised $65 billion in a funding round earlier this year that valued it at $965 billion, eclipsing OpenAI’s valuation for the first time. Anthropic is now considering going public as soon as this fall, Bloomberg News has reported.

— By Seth Fiegerman (Bloomberg News)