Original Author: Ada, Shenchao TechFlow

On May 5, according to The Information, Anthropic committed to paying Google Cloud $200 billion over the next five years.

This multi-year agreement, starting in 2027, will account for over 40% of Google Cloud's revenue backlog, a metric reflecting contractual commitments from enterprise customers.

An AI company that didn't exist five years ago, with a single contract, has consumed nearly half of Google Cloud's future revenue.

On the day the news broke, Alphabet rose 2% in after-hours trading.

But another number is more telling. Alphabet simultaneously made a counter-investment in Anthropic of up to $400 billion.

Money leaves Google's books, goes around, and comes back to Google's books. In the middle, an accounting line item for "Anthropic computing expenditure" appears.

So, is this the largest cloud computing order in history, or the most elegant financial magic trick?

A "Exclusive Commitment" Not Just for Google

To understand the essence of this deal, first look at a set of data that isn't isolated.

On April 20, Anthropic announced an expanded partnership with Amazon, committing to spend over $100 billion on AWS technology over the next 10 years in exchange for up to 5 gigawatts of computing power. In return, Amazon added up to $25 billion in additional investment on top of its existing $80 billion investment.

Last November, Microsoft agreed to invest up to $5 billion in Anthropic, while Anthropic committed to purchasing $30 billion in Azure computing power.

In summary: Google invests $40 billion, receives $200 billion. Amazon invests $33 billion, receives $100 billion+. Microsoft invests $5 billion, receives $30 billion.

The three cloud giants together have invested approximately $78 billion, securing $330 billion in "contractual commitments," a net book inflow of $250 billion.

The essence of this approach is to wash capital expenditure into revenue. Investments in Anthropic are recorded under investing cash flow, while computing fees paid by Anthropic are recorded under main operating revenue. The same money moves from the left pocket to the right, dressing up the balance sheet with a beautiful backlog.

Alphabet, while pumping money into Anthropic, records Anthropic's computing purchases as future revenue, creating a self-reinforcing loop from the AI infrastructure boom.

Wall Street is the true winner in this game. As long as the backlog number is large enough, the P/E ratio holds up.

A Premium Version of the Flywheel

The story of Strategy buying at the top isn't over yet, and the AI circle has just magnified the same flywheel a thousand times.

Strategy's logic was to raise money by issuing stock, buy Bitcoin, the coin's rise boosted the market cap, allowing for more stock issuance and more coin buying.

The cloud providers' logic is: invest in AI companies, AI companies pay for computing power, revenue grows, stock prices rise, capital markets increase bets, and continue investing in AI companies.

The difference is that Bitcoin is a scarce asset; each coin corresponds to real supply on the chain. Computing power is not. The "multi-gigawatt TPU capacity" set to go live in 2027 doesn't even have its racks installed today.

This means a significant portion of that $200 billion is Anthropic's early commitment to purchase chips that haven't been manufactured yet, and Google uses this commitment to convince the capital markets.

Isn't this just a forward contract? The difference is that commodity futures have delivery dates and margin requirements, but this contract does not. What happens if Anthropic can't actually pay this amount in 2027? Who bears the cost of default?

It won't be Google. It has already included the backlog in its earnings call presentations. Alphabet's April 29 earnings call revealed Google Cloud revenue grew 63% year-over-year, exceeding $20 billion, with a cloud business backlog of approximately $462 billion. This number props up Alphabet's current market cap.

It won't be Anthropic either. It just needs to keep raising capital; after all, its next valuation round is still rising.

Ultimately, the ones footing the bill might be the retail investors who thought they were buying into the "AI picks and shovels" story.

$5 Billion Leveraging $330 Billion

Does Anthropic's own scale match this number?

According to media reports, Anthropic's annualized revenue grew from $1 billion to $5 billion in 2025.

A company with an annualized revenue of only $5 billion signs contracts worth $200 billion over 5 years, $100 billion over 10 years, plus $30 billion, totaling $330 billion across three contracts.

Even if Anthropic's revenue increases tenfold, it wouldn't reach $330 billion cumulatively over 5 years.

So, where does the money come from?

There's only one way: continue raising capital.

And the biggest potential investors are precisely these three cloud providers themselves.

This is the whole secret of the cycle. Anthropic doesn't actually need to be profitable; it just needs to maintain a state of "always raising capital," using each new round of funds as the next year's computing bill. As its funding valuation goes up, it can raise even more.

Who does that sound like?

Strategy. It also doesn't need Bitcoin to generate actual cash flow; it just needs to maintain a state of "always being able to issue stock and bonds." The only difference is that on Strategy's balance sheet, there is still an asset like Bitcoin with a globally public pricing mechanism.

The valuation logic for AI companies is now very similar to that of SaaS companies in 2021. Back then, everyone was competing on ARR; today, they're competing on computing commitments. The essence is using the future to discount the present. The only question is whether that future will materialize.

What is OpenAI Doing?

In the same 8-K filing where Amazon increased its bet on Anthropic, OpenAI also committed to consuming approximately 2 gigawatts of Trainium computing power via AWS infrastructure, ramping up starting in 2027.

Two months ago, Amazon invested $50 billion in OpenAI and signed a $100 billion cloud computing contract.

Exactly the same script.

This means three major cloud providers and two major model companies—five players—have played the same game multiple times. Each time is accompanied by headlines like "biggest in history," "strategic cooperation," and "computing revolution."

Behind each instance, the same money is in circulation.

So, who stops first?

It won't be the cloud providers. Their current market caps depend on this narrative. Alphabet raised its 2026 capital expenditure guidance to up to $190 billion. An expenditure of this scale requires companies like Anthropic and OpenAI to "hedge" it into revenue, or Wall Street won't accept it.

It won't be the model companies either. Stopping means failing to secure the next funding round, which also means death.

The first to be squeezed out will likely be the second-tier players who didn't pick the right side.

Will the Music Stop?

The fragility of all this is hidden in the word "fulfillment."

In 2027, the TPU capacity comes online. If Claude's commercialization hasn't kept pace with the expansion of computing power by then, how will Anthropic digest this $200 billion?

If a contract gets renegotiated, canceled, or distributed, Google Cloud's $462 billion backlog immediately reveals its weakness.

But today, no one wants to be the first to call it out. CFOs are writing guidance, analysts are issuing buy ratings, CEOs are carefully choosing their words on earnings calls. Everyone is gambling that they will be standing closest to the chair when the music stops.

The issue now isn't whether there's a bubble; it's how to dismantle the bubble. Everyone knows this is circular trading, but everyone also knows that as long as the AI story continues, no one dares to short the backlog.

Contracts are written on paper, money circulates between the three companies, and valuations bounce between primary and secondary markets. Everyone gets a piece of "future promise," and everyone treats that promise as "current assets."

Until one day in the future, a company's earnings fail to meet expectations. At that moment, that $200 billion will suddenly have another name: contingent liability.

Until that day arrives, the party continues.