Original Author: Ada, TechFlow

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

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

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

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

But another number is more intriguing. Alphabet has also invested up to $40 billion in Anthropic, as a reverse investment.

The money leaves Google's books, circles around, and returns to Google's books, with an additional line item: "Anthropic computing expenditure."

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

An "Exclusive Commitment" Not Just for Google

To understand the essence of this deal, consider a set of data points that are not isolated.

On April 20, Anthropic announced an expanded partnership with Amazon, committing to spend over $100 billion on AWS technology over the next decade in exchange for up to 5 gigawatts of computing power. In return, Amazon added up to $25 billion on top of its existing $8 billion investment.

Last November, Microsoft agreed to invest up to $5 billion in Anthropic, with Anthropic committing to purchase $30 billion worth of Azure computing power.

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

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

The essence of this strategy is transforming capital expenditure into revenue. Investments in Anthropic are recorded as investing cash flow, while the computing fees Anthropic pays are booked as operating revenue. The same money moves from one pocket to another, creating a beautiful backlog on the financial statements.

As Alphabet injects capital into Anthropic, it simultaneously books Anthropic's computing purchases as future revenue, creating a self-reinforcing loop that fuels the AI infrastructure boom.

Wall Street is the true winner in this game. As long as the backlog numbers are large enough, Price-to-Earnings ratios can be sustained.

The Advanced Version of the Flywheel

Before the story of Strategy accumulating at the top was over, the AI sector has amplified the same flywheel a thousandfold.

Strategy's logic was: issue stock to raise capital, buy Bitcoin, the price increase boosts market cap, issue more stock, buy more Bitcoin.

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

The difference lies in scarcity. Bitcoin is a scarce asset, with each coin corresponding to a real on-chain supply. Computing power is not. The "multi-gigawatt TPU capacity" slated for 2027 doesn't even have its server racks installed yet today.

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

Isn't this essentially a forward contract? The difference is that commodity futures have delivery dates and margin requirements, but this contract doesn't. What happens if Anthropic can't pay by 2027? Who bears the default cost?

It won't be Google. It has already written the backlog into its earnings call presentations. Alphabet disclosed in its April 29 earnings call that Google Cloud revenue grew 63% year-over-year to over $20 billion, with cloud business backlog reaching approximately $462 billion. This number props up Alphabet's current market valuation.

It also won't be Anthropic. It just needs to keep raising funds; after all, its valuation in the next round keeps increasing.

Ultimately, the bill might be footed by retail investors who thought they were buying the "shovels in the AI gold rush" story.

$5 Billion Leveraging $330 Billion

Does Anthropic's own scale justify 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 just $5 billion signed a 5-year $200 billion contract, a 10-year $100 billion contract, plus a $30 billion one—totaling $330 billion across three contracts.

Even if Anthropic's revenue multiplies tenfold, its cumulative earnings over five years wouldn't come close to $330 billion.

So, where will the money come from?

There's only one path: further fundraising.

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

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

Sound familiar?

Strategy. It doesn't need Bitcoin to generate cash flow either; it just needs to maintain a state where it can "always issue stock or bonds." The only difference is that Strategy's balance sheet holds Bitcoin, a globally transparently priced asset.

The valuation logic for AI companies is now strikingly similar to that of SaaS companies in 2021. Back then, everyone competed on ARR; today, it's about computing power commitments. In essence, both are discounting the future for 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 stake in Anthropic, OpenAI also committed to consuming approximately 2 gigawatts of Trainium computing power via AWS infrastructure, starting in 2027.

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

The script is identical.

In essence, the three major cloud providers and the two leading model companies, five players, have been playing the same game repeatedly. Each iteration is accompanied by headlines touting "largest ever," "strategic partnership," and "computing revolution."

Behind each iteration is the same money circulating in a loop.

So, who will be the first to stop?

It won't be the cloud providers. Their current market valuations depend on this narrative. Alphabet has raised its 2026 capital expenditure guidance to up to $190 billion. An expenditure of this magnitude requires Anthropic and OpenAI to "hedge" it into revenue; otherwise, Wall Street would disapprove.

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

The first to be squeezed out might be the second-tier players that didn't align themselves correctly.

Will the Music Stop?

The fragility of all this lies in the word "delivery."

In 2027, the TPUs come online. If Claude's commercialization fails to keep pace with the expansion of computing power, how will Anthropic digest that $200 billion?

If a contract gets renegotiated, downsized, or distributed, Google Cloud's $462 billion backlog table would immediately be exposed.

But today, no one is willing to be the first to puncture the bubble. CFOs are writing guidance, analysts are issuing buy ratings, and CEOs are carefully choosing their words on earnings calls. Everyone is betting that they will be standing closest to a chair when the music stops.

It's not a question of whether this is a bubble; it's a question of how to deflate it. Everyone knows these are circular transactions, 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 among three companies, and valuations spin between primary and secondary markets. Everyone holds a "promise of the future," and everyone treats this promise as a "current asset."

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

Until that day arrives, the party continues.