Author: Martin Peers, The Information

Translated by: TechFlow

TechFlow Introduction: Anthropic updated its IPO prospectus on Tuesday, bringing to light the stakes and returns held by Amazon and Google: based on the midpoint of the issuance range, Amazon's investment of approximately $18.6 billion corresponds to a share value of about $258 billion, while Google's investment of about $33 billion corresponds to approximately $132 billion.

Investors should pay attention to the commitment of cloud spending in the prospectus that requires fulfillment "regardless of actual usage": at least $121 billion to Google Cloud and at least $110 billion to Amazon Cloud.

For those unable or unwilling to pursue Anthropic's new shares at a high price, these two companies provide a ready indirect channel; however, Anthropic is also competing with them in software, so the situation is not one-sided.

Image: Left is Amazon CEO Andy Jassy, right is Google CEO Sundar Pichai, image from Getty Images

If you are looking for a cheaper way to gain exposure to Anthropic than directly buying its stock, consider Amazon or Google. The recently updated IPO documents from Anthropic reveal how many shares of Anthropic each of these tech giants will hold and how much they have earned from their early investment in this AI company.

Neither tech giant will hold voting shares of Anthropic, so antitrust regulators need not be concerned about their influence over its management. Nonetheless, their holdings are quite substantial.

Theoretically, Amazon may hold about 20% of Anthropic's outstanding shares. However, due to a self-imposed holding limit, Amazon's Anthropic shares will not exceed 12%, with the remaining shares being convertible notes that can be converted to equity over time. Regardless, Amazon's economic return is quite considerable.

Not taking the holding limit into account, based on the midpoint of Anthropic's proposed IPO pricing range, the entire approximately 20% stake of Amazon would be valued at about $258 billion, while its total investment is about $18.6 billion. (Anthropic's final IPO price is likely to be higher than the initial range, as a report from the Financial Times hinted tonight.)

Google's return is not as good. It will ultimately hold about 10% of the shares, worth $132 billion, corresponding to an investment of about $33 billion. However, that's not bad either!

Both Amazon and Google have committed to continue investing in Anthropic by 2030 under certain conditions, so their investments may increase further. (Google's holding also has an upper limit of 14.99%, which will limit the speed at which it can convert future investment gains from convertible notes into equity.)

Moreover, these figures only account for the equity investment portion. Amazon and Google are bound to receive a large amount of cloud business from Anthropic.

Anthropic's latest prospectus states that it has committed to spending at least $121 billion on Google Cloud by July 2033, "regardless of actual usage." Additionally, it has committed to spending up to $150 billion more to purchase computing power using Google TPU AI chips.

Anthropic has also committed to spending at least $110 billion on Amazon's cloud services by 2036, also "regardless of actual usage." Anthropic has made similar commitments with Microsoft (a total of $49 billion by 2033) and SpaceX (up to $120.5 billion by 2029).

Anthropic is a competitor of major tech companies in the AI space, and increasingly in software. For example, on Tuesday, after Anthropic launched a new office software application to compete with productivity applications sold by Microsoft and Google, stock prices for both Microsoft and Google fell.

However, this industry has its gains and losses. The creation of Anthropic has been driven by the technological advances propelled by large tech companies seeking to expand their cloud business. These bets have brought extremely high returns to the big tech firms.

CoreWeave's New Financing Strategy

For neocloud providers looking for financing methods to expand their data centers, asking clients for "prepayment" has become a popular practice, especially in the current environment of rising interest costs. CoreWeave is the latest neocloud provider to publicly emphasize the benefits of prepayment.

"This year, 70% of our transactions have been prepaid, with clients prepaying up to 100% of the contract value," said CoreWeave CEO Michael Intrator during a conference call on Tuesday.

However, any clients who prepay for computing power may demand some concessions. If interest rates are low, borrowing money may be cheaper than giving discounts to encourage clients to prepay.

In fact, CoreWeave has not always favored prepayment. In February of this year, Intrator boasted that, due to declining costs of capital, CoreWeave was able to reduce its reliance on prepayment, which was "very exciting for us."

On Tuesday, Intrator stated that prepayment is more attractive at current interest rate levels. "Looking ahead, at current yield levels, we will not use the unsecured bond market to finance our business," he said.