Google plans to invest up to $40 billion in Anthropic, the companies confirmed on Friday.

Anthropic noted the agreement expands on a longstanding partnership between the two companies.

Google is putting in $10 billion now, with the remaining investments of up $30 billion contingent on certain performance milestones.

Google plans to invest up to $40 billion in Anthropic, the companies confirmed on Friday, as tech giants ramp up their strategic investments in the leaders in artificial intelligence.

The pact involves an initial $10 billion from Google at Anthropic’s latest valuation of $380 billion. The remaining $30 billion is contingent on certain performance milestones.

Bloomberg was first to report the deal.

Anthropic remarked the agreement expands on a longstanding partnership between the two companies. Earlier this month, Anthropic secured 5 gigawatts worth of computing capacity as part of an announcement with Google and Broadcom that will start to come online next year. Anthropic could decide to add additional gigawatts of compute in the future.

Google provides access to Anthropic’s Claude models through its cloud division, which competes with Amazon Web Services and Microsoft Azure. The firm also offers custom chips called tensor processing units (TPUs) as an alternative to Nvidia’s graphics processing units.

Meanwhile, Google’s Gemini is competing with Anthropic in the sector for AI models and services.

The relationship between the two companies dates back to 2023, when Google invested $300 million in the AI lab for a stake of about 10%. Months later, Google poured in another $2 billion. Ahead of Friday’s announcement, Google’s investment in Anthropic exceeded $3 billion, and it reportedly owned a 14% stake in the organization.

Now, the leading tech companies are investing tens of billions of dollars in the frontier AI labs — OpenAI and Anthropic — in funding rounds that far exceed any prior investments in startups. Much of that investment will return in the form of revenue.

Anthropic’s latest deal with Google lands as the business has been working to address “inevitable strain” on its infrastructure that’s arisen from growing enterprise, developer and consumer demand for Claude. OpenAI has recently criticized its chief rival for failing to secure enough compute.

Google’s investment appears similar to a separate agreement that Anthropic struck with Amazon just weeks prior. The e-commerce giant invested $5 billion into the enterprise, and agreed to invest up to $20 billion in the future tied to “certain commercial milestones,” according to a release.

“Our users tell us Claude is increasingly essential to how they work, and we need to build the infrastructure to keep pace with rapidly growing demand,” Anthropic CEO Dario Amodei noted in a statement at the time. “Our collaboration with Amazon will allow us to continue advancing AI research while delivering Claude to our customers, including the more than 100,000 building on AWS.” Furthermore, experts in investors note the continued relevance.

Anthropic was founded in 2021 by a group of researchers and executives who departed from OpenAI. The company’s AI products, particularly its Claude Code assistant, have exploded in popularity over the last year. Anthropic’s annualized revenue has topped $30 billion. This also touches on aspects of earnings report.

–CNBC’s Jennifer Elias contributed to this report

WATCH: Google leans on custom chips as it pushes deeper into enterprise AI