Akamai secures record $11.6 billion cloud
Akamai has signed a historic seven-year, $11.6 billion cloud services contract with AI startup Anthropic, which includes a warrant for Anthropic to acquire
Akamai and Anthropic have signed a seven-year, $11.6 billion cloud services agreement. This is the largest contract in Akamai’s history and is more than six times larger than a $1.8 billion deal between the two companies reported earlier this year. The agreement, signed on September 24, can potentially grow to roughly $20 billion.
Financial structure and warrants
The landmark deal includes an unusual financial instrument: a warrant for Anthropic to acquire nonvoting preferred stock in Akamai. This warrant is convertible into 7.7 million common shares, representing up to approximately 5% of Akamai’s outstanding stock, at a conversion price of $111.33 per share.
Vesting of the warrant is directly tied to Anthropic’s spending. About 2% of the warrant is expected to vest after Anthropic makes its first payment. The remaining portions vest as Anthropic spends more, with each additional $3 billion committed unlocking roughly another 1% of Akamai’s stock. This is the first time Akamai has attached a warrant to a cloud deal.
Revenue, investment and market impact
Akamai expects no revenue from this deal in 2024. Revenue generation is not scheduled to begin until the second half of 2027. The company projects $150 million to $300 million in revenue from the contract in that year. By the end of 2028, the annual revenue run rate is expected to reach about $1.7 billion.
To fulfill the agreement, Akamai must first make a significant capital outlay. The company plans to spend roughly $5.5 billion to build the required infrastructure capacity. This includes adding about $1.7 billion to this year’s capital spending for components such as memory. This creates a two-year gap between cash outflow and cash inflow. The contracted $11.6 billion amount is worth close to three years of Akamai's current total sales and more than two-thirds of its $16 billion market value.
Strategic context and implications
The partnership signals a key strategic shift for Akamai, repositioning it from a mature content delivery network into a supplier of AI compute infrastructure. The deal emphasizes the use of central processing units (CPUs), the general-purpose chips used by AI agents. Akamai did not specify the exact tasks Anthropic will use its infrastructure for, but Anthropic is understood to want distributed capacity for running AI agents, not for training models.
The warrant structure mirrors a trend where cloud and chip providers take equity stakes in their major AI customers. AMD used a similar warrant structure with OpenAI last year, tying warrants to chip-purchase milestones. Anthropic has previously received investments from Amazon, Google, Microsoft, and AMD while purchasing chips or cloud capacity. Dario Amodei, Anthropic's CEO, noted that "Anthropic does not participate in these deals at the 'same scale as some other players.'" The warrant acts as a discount on the contract not reflected in the headline figure and provides Anthropic with insurance for guaranteed capacity.
Market reaction and conditions
The announcement had an immediate impact on Akamai's stock. After falling 6.78% before the news, shares rose as much as 17% in after-hours trading on Thursday. They opened 14% higher the next morning and closed up 3.20% at $113.94.
The commitment is not unconditional. According to Akamai’s securities filing, the parties’ obligations depend on Akamai meeting delivery and service-availability requirements. The agreement can also be terminated by either party under certain conditions. Akamai will begin spending roughly $5.5 billion to build the required infrastructure, with revenue from the contract not starting until the second half of 2027.
