Key Takeaways
- Alphabet’s Google, Nvidia, Microsoft, Broadcom, AMD, Micron and TSMC will buy $26 billion of Anthropic’s shares at its IPO price, on top of an offering of up to $64.4 billion.
- Most of those buyers also sell Anthropic the computing behind its $895 billion of commitments, so part of the cash that pays their bills is their own.
- Broadcom has the most at stake, with $161 billion of Anthropic’s commitments against $63.9 billion of revenue in fiscal 2025.
- The buyers face no six-month lockup, and the Anthropic share of their backlogs is only as solid as Anthropic’s next few quarters.
Google parent Alphabet (GOOG) is about to buy into one of its biggest customers, and it’s bringing company.
Alphabet, Nvidia (NVDA), Microsoft (MSFT), Broadcom (AVGO), AMD, Micron and TSMC will buy $26 billion of Anthropic’s shares at its IPO price through a private placement, Anthropic’s updated filing on Tuesday shows. That’s on top of the up to $64.4 billion Anthropic and some of its backers are raising in the IPO itself, at $70 to $78 a share.
Tech critic Ed Zitron wasn’t impressed. When word of the deal broke on Monday, he posted on X that “shareholders should revolt,” since the buyers are “literally feeding themselves money.”
Harsh, but he has a point.
Follow the money
Anthropic’s filing shows $895 billion of commitments, mostly for computing power and chips, and about $70 billion of that comes due in the year through September 2027. Its S-1 puts the biggest pieces with Broadcom, at $161 billion, and Google, at $121 billion. Microsoft, like Google, is both an Anthropic backer and a key supplier of its computing power.
So the companies sending Anthropic its bills are now covering part of them. The $26 billion works out to more than a third of what Anthropic owes over the next year.
Nor is this the first loop. In November 2025, Nvidia agreed to invest up to $10 billion in Anthropic and Microsoft up to $5 billion, while Anthropic committed to buy $30 billion of computing on Microsoft’s Azure cloud and up to a gigawatt of capacity on Nvidia’s systems.
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Broadcom has the most riding on it
That $161 billion is about two and a half times the $63.9 billion of revenue Broadcom brought in during fiscal 2025, which ended in October. Analysts expect Broadcom’s revenue to more than quadruple by fiscal 2028:
Anthropic is a big part of how Broadcom gets there, which made it a $161 billion risk even before Broadcom agreed to buy into the IPO. Now some of the money Anthropic pays Broadcom will have started out as Broadcom’s own.
Small money, until you’re borrowing it
The case for the deal is that $26 billion is small change for these companies, and it buys them a piece of their biggest customer. Alphabet’s free cash flow alone topped $60 billion in every year from 2021 to 2025:
But this year looks very different. Alphabet’s free cash flow was negative $9.1 billion in the third quarter, a figure that includes a $5.2 billion EU fine payment, and analysts now expect negative $18.4 billion for 2026 and negative $43.0 billion for 2027. It roughly doubled its long-term debt to $101.1 billion at face value in the first half of 2026 and sold $49.6 billion of new stock in June. So whatever Alphabet puts into Anthropic is, in effect, borrowed money and new shares.
Microsoft’s spending tells a similar story. Its capital spending has nearly quintupled in four years as it builds the kind of capacity Anthropic rents:
Every dollar Microsoft puts into the IPO can come back to it as payment for that capacity.
No vote, no lockup
Plus: the buyers get nonvoting Class N shares at the same price public investors pay. And because it’s a private deal, they won’t face the standard six-month lockup that usually keeps insiders from selling right after a debut.
So I don’t buy the idea that the stake ties these suppliers to Anthropic for the long haul. Any of them could sell once the stock trades. If a car dealer covered a third of your first year of payments, you’d still drive off the lot, and the dealer would still book the sale.
Same deal here.
Where that leaves the suppliers
The placement is a small slice of what these companies spend. But some of the Anthropic revenue in their backlogs is now their own money coming back to them, and Broadcom has the most of it. The way I see it, these stocks are worth owning for their own businesses, and the Anthropic part of their backlogs is only as solid as Anthropic’s next few quarters.
Of course, Anthropic’s revenue reached nearly $17 billion in the third quarter, against $1.4 billion a year earlier. If it keeps growing like that, the circle will look like a smart early bet. The first test comes when the stock starts trading, which the Wall Street Journal reports could be Nov. 19 or 20.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
