Summary
From the article:
Google has assembled one of the largest infrastructure financing programmes in history to supply more than $150bn of artificial intelligence chips to Anthropic.
Surging demand from Anthropic, in which Google is an investor, has led the Big Tech company to orchestrate a sprawling operation to supply its chips to the start-up, according to people involved in the project and corporate filings reviewed by the FT.
The effort brings together Google, Broadcom, Apollo, Blackstone, Morgan Stanley and a slew of crypto miners in a web of transactions that stretches from chip manufacturing to data centre development.
At the centre of the project are Google’s tensor processing units, or TPUs — AI chips it has co-developed with Broadcom since 2016. Once used largely inside Google’s own data centres, the chips have begun to be sold externally, challenging Nvidia’s dominance of the AI processor market.
[...]
To support the relentless surge in demand for the AI chips, Google, Broadcom and Wall Street investors have each taken on different pieces of the financial risk.
Google guarantees the data centres. Broadcom commits to buying the chips and helps finance them. Apollo and Blackstone provide much of the private-credit capital that purchases the hardware before leasing it to Anthropic.
“This is each of us putting our balance sheet to work,” said a Google executive involved in the effort. “We’re doing it on the data centre side, [Broadcom’s] doing it on the chip side.”The web of contracts underpinning these arrangements adds up to about $200bn, with roughly four-fifths tied to the chips themselves, making it one of the largest infrastructure financings ever assembled.
A programme of such a size posed a problem: none of the companies involved wanted to carry tens of billions of dollars of AI chips on their balance sheets.
[...]
That challenge produced an unusual solution. Morgan Stanley helped arrange a private-credit vehicle, funded by outside investors, that buys the chips and leases them to Anthropic in an adaptation of the vendor-financing model Boeing and GE built to sell aircraft and engines.
[...]
Financing the chips solved only half of Google’s problem. The company also needed enough powered data centres to house them. “We have a schedule and we’re looking for capacity that will fit the schedule,” the Google executive said. “Crypto miners with excess capacity were helpful.”
[...]
People familiar with the matter said the Big Tech company had so far backstopped 10 developments with 2.4GW of power for TPUs. Google’s guarantees put it on the hook for as much as $44bn if all the leases go bad, though it marks the liability at $815mn on its balance sheet. It could also step into the leases itself.
The Google team is now racing to put together additional data centre projects with enough power to ultimately house all of the 4.5GW of TPU hardware they’ve agreed to sell. “We’re spending a lot of time on [power] right now — all of our time,” said the Google executive.