Last I checked, AWS reserve pricing for one year of an 8x H100 pod costs more than just buying the pod yourself (with tens of thousands left over per server for the NVIDIA enterprise license and to hire people to manage them). On demand pricing is even worse.

This is essentially money that they would have spent to build out their cloud anyway, except now they also get equity in Anthropic. Whether or not Anthropic survives, AWS gets to keep all of those expensive GPUs and sell them to other customers so their medium/long term opportunity cost is small. Even if the deal includes cheaper rates the hardware still amortizes over 2-3 years, and cloud providers are running plenty of 5+ year old GPUs so there's lots of money to be made in the long tail (as long as ML demand keeps up).

They're not making money yet because there's the $4 billion opportunity cost, but even if their equity in Anthropic drops to zero, they're probably still going to make a profit on the deal. If the equity is worth something, they'll make significantly more money than they could have renting servers. Throw financial engineering on top of that, and they may come out far ahead regardless of what happens to Anthropic: Schedule K capital equipment amortizations are treated differently from investments and AFAICT they can double dip since Anthropic is going to spend most of it on cloud (IANAL). That's likely why this seems to be cash investment instead of in-kind credits.

I think that’s what people mean when they say Amazon is making money off the deal. It’s not an all or nothing VC investment that requires a 2-3x exit to be profitable because the money just goes back to AWS’s balance sheet.