Over the last three years, OpenAI and Anthropic have evolved from speculative artificial intelligence (AI) laboratories into full-blown infrastructure behemoths. Between the two companies, trillions of dollars have been committed to future infrastructure projects.
Whether it's Project Stargate or new chip deals with Nvidia or Advanced Micro Devices, OpenAI and Anthropic are on a mission to become the default platforms on which all things AI are built.
Smart investors understand that as these two unicorns become more deeply embedded across AI, semiconductor stocks aren't the only ones poised to benefit. If you're looking for ways to profit from the surging growth of OpenAI and Anthropic, then you'll want to check out these three members of the "Magnificent Seven."
OpenAI's flywheel is a bellwether for Microsoft
Microsoft (MSFT 0.42%) was OpenAI's first hyperscaler investor. Through this partnership, it provided OpenAI with the infrastructure to develop and scale up its foundational model, ChatGPT.
The benefit for Microsoft was that the company essentially purchased a first-mover advantage in integrating generative AI. Today, ChatGPT is heavily distributed throughout Microsoft's cloud service, Azure.
Whether it's coding on GitHub, data analytics through Dynamics, or generic prompts on Copilot, the increasing use of OpenAI's software has fueled a surge in the volume of AI workloads powered by Azure. Moreover, enterprises constantly need incremental cloud services -- which ultimately points them to Microsoft.
Through its partnership with OpenAI, Microsoft has become one of the strongest pillars supporting the AI revolution. This creates a flywheel effect between OpenAI and Azure -- ultimately making OpenAI's adoption a key tailwind for Azure's long-term trajectory.
Image source: Getty Images.
Amazon is quietly turning into an AI infrastructure powerhouse
The role of Amazon (AMZN 1.61%) in the AI narrative features some notable large-scale infrastructure agreements.
For starters, Amazon Web Services (AWS) recently struck a $38 billion GPU leasing deal to ease OpenAI's capacity strains. While OpenAI's workloads are still primarily running on Azure, the deal with AWS underscores how alternative hyperscale cloud operators are capturing market share as developers are constantly pressed to secure more data center capacity.
Beyond OpenAI, Amazon's relationship with Anthropic uniquely positions the company across several areas of AI. Over the last few years, it has committed $8 billion in investment capital to Anthropic.
Amazon benefits from this relationship in two ways. First, similar to OpenAI, Anthropic is a major user of GPU clusters operated by AWS. Perhaps more importantly, though, is Anthropic's adoption of Amazon's in-house designed application-specific integrated circuits (ASICs), Trainium and Inferentia.
Custom chips like these are designed to lower training and inference costs while also improving performance across specific workloads. In theory, as Anthropic's adoption rises, Amazon's strategy of building a vertically integrated infrastructure stack will be increasingly validated.
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Key Data Points
If Amazon is able to position its AI accelerators as high-caliber alternatives to the general-purpose GPUs designed by Nvidia and AMD, then AWS should enjoy a lucrative degree of pricing power as customers become increasingly locked in to the platform.
In the long run, this should increase their switching costs -- making the idea of going to another platform virtually unthinkable. In turn, Anthropic has given AWS a subtle competitive advantage as the AI cloud race heats up.
Anthropic and OpenAI have given Google Cloud their seals of approval
Shortly after ChatGPT was launched, many on Wall Street concluded that Alphabet's (GOOGL 1.41%) (GOOG 1.41%) cash-cow Google Search business could be facing an existential crisis. After all, why would people continue to spend time parsing through Google results and combing the webpages it links to when they could ask a large language model (LLM) and receive an answer directly?
What most of those investors were overlooking, though, was the growth in the company's Google Cloud division in relation to its advertising segment. Throughout the AI revolution, Google Cloud has not only achieved impressive top-line growth, but the business itself is also now consistently generating operating income.
What's pretty rich is that two of Google Cloud's marquee customers are OpenAI and Anthropic -- the two companies that were supposedly in line to sap the life from Google Search. OpenAI is leveraging Google Cloud for added computing power. And Anthropic is complementing its existing chip stack of Nvidia GPUs and Amazon's ASICs with Alphabet's custom chips, known as Tensor Processing Units (TPUs).
Anthropic's decision to train next-generation models on TPUs should strengthen Google Cloud's competitive position. In the cloud infrastructure space, both AWS and Azure have greater market shares than Alphabet, but it is swiftly becoming a key AI infrastructure platform, not just a tertiary cloud service.
And as OpenAI continues to tackle its capacity bottlenecks, Google Cloud stands to benefit from accelerating user adoption as well as its broader exposure to continued data center construction.
