Shares of Akamai Technologies, Inc. (NASDAQ: AKAM) climbed 3% on Friday after the company announced a significantly expanded partnership with AI model developer Anthropic, an agreement that could ultimately be worth roughly $20 billion in total.

The deal commits Anthropic to spend $11.6 billion over seven years to secure cloud infrastructure capacity from Akamai, which the AI company will use to support its AI operations. The arrangement also has room to grow: its value could expand by an additional $9 billion, pushing the total to approximately $20 billion.

Akamai shares were trading at $113.94 after the news broke on Friday. The stock has a 52-week range of $70.82 to $165.45.

What Akamai Is Providing

Akamai said its infrastructure will support Anthropic's CPU workload needs, a detail that points to a shift in AI computing demand. Model training has traditionally leaned on GPUs, but running trained models, a process known as inference, is increasingly relying on CPU power instead. That distinction matters for the shape of the deal: rather than the GPU-heavy buildouts associated with model training, the commitment is oriented around CPU capacity of the kind Akamai already operates across its global footprint.

For comparison, Akamai had already disclosed $2.8 billion in multi-year cloud customer commitments in its second-quarter earnings release in August. The Anthropic agreement alone is more than four times that total, a measure of how quickly AI companies are locking in computing capacity years in advance.

Akamai CEO Tom Leighton commented on the deal, saying the company's global footprint and enterprise experience position it to support secure AI workloads.

Anthropic Receives a Stake in Akamai

As part of the arrangement, Anthropic received a warrant that allows it to purchase convertible preferred stock equal to about 5% of Akamai's outstanding shares. The purchase price is set at $111.33 per share, just below Friday's $113.94 trading level.

A 2% portion of the warrant vested immediately when the deal was announced. The remainder vests only if Anthropic expands its commitment further, with each additional $3 billion in spending unlocking another 1% of the warrant. The tiered structure ties the size of Anthropic's potential equity stake directly to how much additional capacity it commits to over time.

Wall Street Responds With Higher Targets

Wall Street analysts responded quickly to the announcement, with several firms raising their price targets on the stock. RBC Capital maintained a Sector Perform rating and set a $135 price target, while raising its revenue and capital expenditure forecasts for Akamai. The firm called the deal a validation of Akamai's AI infrastructure strategy.

Other firms were more bullish. Piper Sandler raised its price target to $158, BofA Securities lifted its target to $185, and Guggenheim moved its target to $225. Evercore ISI kept a $175 target with an Outperform rating, and UBS raised its target to $148. Piper Sandler and Guggenheim maintain Buy ratings on the stock, while Evercore ISI's rating also stands at Outperform. The spread from RBC's $135 to Guggenheim's $225 underscores how widely analyst views on the deal's impact differ.

Revenue Outlook

The deal is expected to generate approximately $1.66 billion in annual recurring revenue for Akamai, a figure that would represent a meaningful addition to its cloud and infrastructure segment. The seven-year term spreads that revenue across future reporting periods, and the deal's own terms set out clear markers to watch: whether Anthropic draws on the additional $9 billion in spending room, with each increment unlocking more of the warrant.

Akamai has returned 46% over the past year, according to InvestingPro data. The stock currently trades at a price-to-earnings ratio of 41.1.

This article originally appeared on CoinCentral.