Taiwan Semiconductor Manufacturing Company has approved plans to invest up to $1 billion in OpenAI and Anthropic, buying equity stakes in the two artificial intelligence developers that rank among the chipmaker's most important customers, Reuters reported on Monday.
What TSMC's Board Approved For more context on this story, see our ongoing latest AI developments.
According to Reuters, TSMC's board signed off on two separate investments on Tuesday: up to $500 million in OpenAI preferred stock reserved for large investors, and up to $500 million to purchase Anthropic common shares at the company's expected initial public offering price.
The Anthropic stake will be acquired through the Claude maker's IPO, which is expected to price next week. The company's amended SEC filing values the offering at roughly $1.33 trillion, with the order book reportedly oversubscribed multiple times.
For TSMC, the world's largest contract chipmaker, the move represents an unusual step: taking direct financial stakes in the companies that buy its silicon. The Wall Street Journal reported that the investment may give markets "a shot of confidence as the artificial-intelligence trade shows signs of strain."
A Timely Vote of Confidence
The announcement lands at a delicate moment for AI-linked equities. Tech stocks have gyrated in recent weeks as investors have grown increasingly jittery about the pace of AI spending, and Anthropic's IPO roadshow has been running against a backdrop of post-election market upheaval.
TSMC's endorsement carries weight because of its position at the center of the AI hardware supply chain. The company's fabrication plants physically produce the vast majority of Nvidia's AI data center chips as well as most of Apple's custom processors, and both OpenAI and Anthropic are purchasing enormous quantities of TSMC-manufactured hardware for their data center buildouts.
Circular Financing Concerns Return
The deal will also intensify a debate that has shadowed the AI boom: what analysts call circular financing, in which suppliers invest in their own customers, inflating revenue figures on both ends of the transaction.
The Wall Street Journal reported that analysts have warned such arrangements among investors, suppliers, and customers have made it difficult to evaluate genuine market demand for AI-related hardware and services.
TSMC's planned investment still pales next to the largest example of the trend. Nvidia has invested $30 billion in OpenAI and $10 billion in Anthropic so far, in addition to tens of billions of dollars spread across many other AI and robotics companies, according to Ars Technica.
TSMC Can Easily Afford the Bet
If the investment is modest by TSMC's standards, that is because the chipmaker has never been richer. Ongoing demand for AI chips has delivered six consecutive quarters of record profit, with TSMC earning more than $23 billion in profit during the July-through-September quarter alone, according to Reuters.
Most of the company's leading-edge fabs are located in Taiwan, but TSMC also operates facilities in Japan and China and is building out an expanding manufacturing cluster in Arizona, a project that has become strategically important as governments seek to localize advanced chip production.
A New Blueprint for the AI Supply Chain?
TSMC's decision to convert some of its AI windfall into equity stakes signals how deeply intertwined the industry's balance sheets have become. Suppliers now hold positions in their customers, customers hold positions in their suppliers, and the largest chip designer of all — Nvidia — sits on both sides of nearly every major deal.
For OpenAI, the investment lands as the company's quarterly revenue reportedly crossed $10 billion for the first time, according to TechCrunch, even as operating losses continue to mount. For Anthropic, it adds another marquee name to an IPO order book that Reuters and other outlets have described as heavily oversubscribed.
The two investments are expected to close alongside Anthropic's IPO and OpenAI's ongoing funding round. Whether markets read them as confidence or as one more turn of the circular-financing wheel will likely depend on how the AI trade behaves over the coming weeks.
For now, the world's most important chipmaker has put real money behind its view that demand for AI computation is durable — and that its two biggest AI customers will still be standing when the current jittery stretch of market history is over.
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