Google to finance $5B Texas AI data center for Anthropic

Tech

Google to finance $5B Texas AI data center for Anthropic

Google (NASDAQ: GOOGL) is planning to provide financial support for the construction of a multibillion-dollar data center project in the U.S. state of Texas, to be leased to leading artificial intelligence (AI) company Anthropic, as the need for AI infrastructure to support ever-advancing models increases.

According to a Financial Times report, citing “people familiar with the matter,” the 2,800-acre data center campus in Texas could exceed $5 billion in its initial phase, with Google‘s loan for the construction phase being part of the tech giant’s broader infrastructure deal with Anthropic.

A consortium of banks is competing to provide the financing by mid-year for the initial phase, while support from Google should allow the project to raise the financing at a lower cost, given its strong credit rating, sources told the FT.

Construction has reportedly already begun on the site, which is expected to deliver around 500 megawatts of capacity by late 2026, enough to power around half a million U.S. homes, with potential expansion to 7.7 gigawatts. It is also located near major gas pipelines, allowing it to rely on onsite gas turbines.

The report of Googles deepening infrastructure support for Anthropic comes as the latter firm remains in a standoff with the U.S. government over how state and military bodies use its AI models.

Up until recently, Anthropic had a reported $200 million contract with the U.S. military to use its technology within the Pentagons classified networks. In February, this relationship began to fracture when Anthropic said it “cannot in good conscience” comply with a demand from the Department of War (DoW) to remove safety precautions from its AI models, such as those related to mass domestic surveillance.

The company reportedly also expressed concerns over the use of its products in the abduction by U.S. military forces of Venezuelan President Nicolás Maduro in January.

In response, U.S. Secretary of War Pete Hegseth took a hard stance and, on February 27, labelled Anthropic a “supply chain risk,” a designation usually reserved for U.S. adversaries, and ordered that, effective immediately, no contractor, supplier, or partner that does business with the U.S. military may conduct any commercial activity with Anthropic.

Anthropic vowed to fight the matter in court, and on the same day the FT reported on Googles deepening infrastructure ties with Anthropic, U.S. federal judge Rita Lin of the Northern District of California temporarily barred U.S. agencies from implementing the supply chain risk designation, arguing that the resulting “financial and reputational harm” to Anthropic could “cripple” the company.

Not one to skirt controversy, Anthropic‘s latest expansion of its AI infrastructure also comes just a couple of days after leaks of its next frontier AI model, named “Mythos,” caused cybersecurity stocks to slump due to fear that the powerful AI could be a hacker’s dream device.