Akamai has signed an $11.6 billion, seven-year deal with Anthropic to host the AI lab's CPU-based workloads on its global network. The agreement includes a warrant for Anthropic to buy 5% of Akamai's shares, with the full deal potentially reaching $20 billion.
TL;DR
- Akamai's largest-ever deal highlights the shift towards edge AI infrastructure.
- The agreement could bolster AMD's position in the AI chip market.
- Investors remain cautious about Akamai's capital expenditure and delayed revenue recognition.
What happened
Akamai, a content delivery network (CDN) turned cloud infrastructure supplier, has struck an $11.6 billion deal with Anthropic. The seven-year agreement involves running Anthropic's CPU-based workloads on Akamai's distributed infrastructure, which spans 4,000 points of presence in 700 cities and 130 countries. The deal includes a warrant for Anthropic to purchase 7.7 million shares of Akamai's non-voting convertible Series B preferred stock, representing about 5% of Akamai's outstanding shares. The shares will be released in four tranches, with the first 40% delivered upon Anthropic's first payment. The remaining tranches will vest as Anthropic invests $3 billion in services for each, potentially making the total deal worth about $20 billion.
This landmark contract is the largest in Akamai's history and underscores the growing trend of edge-based compute for AI. It follows an earlier $1.8 billion deal with Anthropic signed in May, which included GPU services. The current deal is focused on CPUs, with AMD being a likely candidate for the hardware, given its existing collaboration with Anthropic and a recent agreement with Lenovo to offer solutions based on AMD's Helios rack-scale solution.
Why it matters
For Akamai, this deal represents a significant step in its strategic shift towards cloud infrastructure services (CIS). While CIS currently accounts for only 9% of Akamai's total revenue, it has shown substantial growth, increasing by 39% year-over-year. The Anthropic deal could accelerate this growth, although investors are concerned about the $5.5 billion in capital expenditure required to support the initial deal and additional costs if the full $20 billion arrangement is realized. Revenue from the deal is not expected until the end of 2028, with an estimated $1.7 billion in annual recurring revenue thereafter.
For AMD, the deal could represent a significant win in its efforts to compete with NVIDIA in the AI chip market. The collaboration between AMD and Anthropic, including the commitment to buy AMD's Helios solution, positions AMD favorably in the AI infrastructure space. The deal also highlights the growing importance of edge compute in AI, with competitors like Cloudflare, Fastly, and Vultr also expanding their offerings in this area. The hyperscaler public clouds AWS, Google, and Microsoft are also investing in edge AI services, indicating a broader industry shift towards distributed AI infrastructure.
Key facts
- The deal is valued at $11.6 billion, with a potential total value of $20 billion.
- Anthropic will buy 7.7 million shares of Akamai's non-voting convertible Series B preferred stock, representing about 5% of Akamai's outstanding shares.
- The shares will be released in four tranches, with the first 40% delivered upon Anthropic's first payment.
- Akamai's CIS services grew 39% year-over-year, accounting for 9% of its total $1.1 billion in Q2 2026 revenue.
- Akamai's global network spans 4,000 points of presence in 700 cities and 130 countries.
- AMD and Anthropic have a multi-year engineering collaboration, with Anthropic committed to buying AMD's Helios rack-scale solution.
- Akamai projects it will need $5.5 billion in capital expenditure to support the initial deal, with additional costs if the full $20 billion arrangement is realized.
- Revenue from the deal is expected to start at the end of 2028, with an estimated $1.7 billion in annual recurring revenue.
Context
The deal between Akamai and Anthropic highlights the growing trend of edge-based compute for AI. As AI models become more complex and resource-intensive, the need for distributed infrastructure to support them increases. This shift towards edge compute is not limited to Akamai; competitors like Cloudflare, Fastly, and Vultr are also expanding their offerings in this area. The hyperscaler public clouds AWS, Google, and Microsoft are also investing in edge AI services, indicating a broader industry shift towards distributed AI infrastructure.
For AMD, the deal represents a significant opportunity to gain ground in the AI chip market. The collaboration with Anthropic and the commitment to buy AMD's Helios solution positions AMD favorably against competitors like NVIDIA. The deal also underscores the importance of edge compute in AI, which could drive further demand for AMD's products in this growing market. However, the deal also highlights the challenges facing Akamai as it seeks to transition from a CDN to a cloud infrastructure supplier. The substantial capital expenditure required to support the deal, along with the delayed revenue recognition, poses risks for Akamai and its investors.
