Alphabet recently expanded its partnership with Anthropic, allowing the large language model maker to deploy more of its Tensor Processing Units (TPUs). Anthropic had already agreed to acquire $21 billion in TPUs from Broadcom to be deployed this year. The new deal is for 3.5 gigawatts of TPU compute capacity to be delivered starting in 2027, with deployments through Google Cloud and directly by Broadcom, contingent on Anthropic's continued commercial success. Letting Broadcom sell TPU racks directly to Anthropic marks a strategic shift for Alphabet. Morgan Stanley estimated that for every 500,000 TPUs Alphabet sells, it would equate to around $13 billion in additional revenue and $0.40 in earnings per share. Alphabet is described as the only company with both a top-tier foundation AI model and its own AI chips, giving it a structural cost advantage over competitors relying on Nvidia GPUs. The stock trades at a forward price-to-earnings of 25 times 2027 earnings estimates.