- Anthropic could hand Meta a cloud credibility boost if it decides to ink a multi-billion-dollar deal for compute capacity
- But analysts said compute alone won’t make Meta a cloud hyperscaler
- Data center backlash could also slow the AI buildout - which wouldn't be great news for Meta's cloud ambitions
Anthropic is reportedly mulling a multi-billion-dollar compute deal with Meta that could jumpstart the latter’s ambitions to move beyond the social media space and into the cloud business.
Sources told The New York Times and CNBC that the frontier model developer is in early stage talks to secure compute capacity from Meta, in a deal that could be worth around $10 billion.
The move comes as Anthropic looks for compute capacity to train and run its flagship Claude model. In May, Anthropic inked a deal to buy 300 MW of compute from SpaceXAI at a cost of $1.25 billion per month through May 2029. Anthropic in April also committed to spend $100 billion over the next 10 years to secure 5 GW of compute from AWS. Anthropic also has large-scale compute deals with Microsoft and Google.
Analysts previously told Fierce that offering bare metal compute (that is, without services) could be one of the ways Meta could fund success in the cloud market.
However, Synergy Research Group Chief Analyst John Dinsdale told Fierce that “the main issues for Meta will be around capabilities, credibility and competitive positioning.” He added that having large amounts of compute capacity available does not necessarily translate to a successful cloud business that can offer services and support customers.
“Running successful cloud computing services requires a very different skillset and business model relative to being a leading social media company,” Dinsdale said. He likened Meta’s move to Google’s decision to move from consumer market services to serving enterprise customers. “It took a long time for Google to build the organization and skills to enable it to succeed with business customers.”
Looming hurdles
Beyond the business aspects, there’s another thunderhead looming over Meta’s – and the industry’s – expansion ambitions.
There are just over 800 data centers in the construction pipeline worldwide, with 437 of these slated for the U.S., according to Synergy Research Group. But data from the National Conference of State Legislatures shows moratoriums on data center construction have been proposed or adopted in 15 states as citizen backlash and environmental concerns about these facilities rise. A national moratorium has also been floated.
While not all of these proposals will succeed, Morningstar DBRS noted the efforts could still impact data center financing considerations.
“As states consider new taxes, restrictions and moratoriums on data center growth, escalating stakeholder opposition could become a material credit factor, potentially weakening data center project credit quality by reducing development visibility, increasing regulatory risk and challenging assumptions around the pace and certainty of future AI-driven capacity expansion,” Morningstar’s team wrote in a note to investors.
This, of course, could prove to be a huge problem for a capital-intensive industry where even hyperscalers have had to turn to debt and equity financing to fuel their data center expansions.
Meta is reportedly weighing a multi-billion-dollar equity funding raise, following in the footsteps of Alphabet, Oracle and Amazon. However, Bloomberg noted that demand for bond offerings has already slackened significantly since the height of the AI boom.
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