Jeff Dean says Google didn't foresee coding. Anthropic did, and now owes Google $121 billion
Gemini's former co-lead says coding was one of Google's priorities, not the priority. The lab that made it the priority now owes Google Cloud at least $121.3 billion, and Alphabet's private holdings, mostly one company, have doubled to $128.2 billion this year. For Alphabet holders the miss has become a single, concentrated position.
Richard Tang · 4 min read
Coding was the miss Dean names first
Asked on stage what he had predicted wrong, Jeff Dean, who co-led Google's Gemini models before leaving in August to run the startup Discovery Loop, named the capability Anthropic$350B — Anthropic, private, latest valuation $350B has built its business on 1.
"I think coding capability has proven to be really important. I didn't necessarily foresee that was such a key unlocker for making these models really capable in solving lots of different kinds of problems," he told Stanford's Institute for Human-Centered AI on October 28. "In the Gemini effort, it was one of the things we focused on, but it was not, like, the thing we focused on" 1.
Why code is the cheapest place to let a model act
The reason coding unlocks so much is the same reason Dean's new company starts where "you can do the entire loop in digital form" 1: code can be run, and a test passes or fails. That makes it the cheapest place to let a model act, check its own work and try again.
The lab that ranked it first
Anthropic ranked it first. Its IPO prospectus says it "designed Claude Code around the agentic coding capabilities we expected our models to achieve, which positioned it to scale rapidly as those capabilities arrived" 2. Revenue went from $197 million in the last quarter of 2024 to $17.0 billion in the quarter to September 30, 2026; for the first nine months of 2026 it was $33.2 billion, up 1,206% 2.
The coding agent is where the spend concentrates. In the September quarter, enterprise users who did not use Claude Code spent less than $75 a month on average, while the top 5% who did spent about 20 times that 2.
Alphabet gets paid three ways
By Dean's account Google+0.87% — Google, up 0.87 percent today did not make coding its priority, but its parent is on Anthropic's ledger three times.
As a shareholder. Alphabet carried $128.2 billion of non-marketable equity at September 30, double the $64.1 billion of December, on a cost of $48.6 billion, and booked $116.3 billion of unrealized gains on it in nine months 3. The filing says the holdings "primarily consist of our investment in one private company" and does not name it 3. Anthropic's prospectus shows Google investing $10.0 billion in May, with $20.0 billion more in notes available through 2030 and its ownership capped at 14.99% 2.
Alphabet's private holdings doubled in nine months to $128.2B
Data
| Non-marketable equity carrying value | |
|---|---|
| Cost basis | $48.6B |
| Dec 31, 2025 | $64.1B |
| Sep 30, 2026 | $128.2B |
The cloud contract alone is a fifth of Google Cloud's backlog
As a landlord. Anthropic has committed to spend "at least approximately $121.3 billion" on Google's cloud between April 2026 and July 2033, "regardless of actual usage", and must pay the difference if it falls short 2. Google Cloud's whole backlog of signed, unrecognized contracts is $560.8 billion 3, so one customer's minimum equals about a fifth of it.
As a storefront. Customers buying through cloud marketplaces such as Google's accounted for 44% of Anthropic's revenue in the nine months; the prospectus does not split it by provider 2.
The catch is that all three are one bet
The three lines rise and fall with the same company. Anthropic has signed about $895 billion of purchase commitments and leases, against $17.0 billion of revenue last quarter, and it swung from $974 million of operating income in the June quarter to a $567 million operating loss in September 2. If its growth slows, Alphabet's paper gain, a fifth of its cloud backlog and its marketplace sales would fall together. Alphabet's own filing describes its private portfolio as mostly one company 3.
Anthropic has signed $895B of commitments against $17B of quarterly revenue
Data
| Value | |
|---|---|
| Anthropic purchase commitments and leases | $895B |
| Google Cloud signed backlog | $560.8B |
| Anthropic minimum owed Google Cloud | $121.3B |
| Anthropic revenue, Sept quarter | $17B |
The market is not treating Alphabet's commitments lightly. The stock fell 12% on October 29, the day the 10-Q came out, erasing about $500 billion, the biggest drop in market value in its history 4.
The IPO turns a private mark into a public price
The IPO gives the stake a public price. Anthropic granted Google an option to buy up to $10.0 billion of shares at the offering price 2, and after the listing the holding has a market quote instead of a private-round mark. The cleaner way to read Alphabet now is to treat its private portfolio and Anthropic's cloud contract as one position: $128.2 billion carried on the balance sheet 3 and a $121.3 billion contracted minimum 2, about $250 billion between them, mostly riding on one company.
Google ranked coding as "one of the things we focused on." Anthropic ranked it first. Alphabet's balance sheet now holds the result of both choices.
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