Amazon steps up AI race with up to $4 billion deal to invest in Anthropic

Amazon.com announced on Monday that it plans to invest up to $4 billion in the high-profile startup Anthropic, in an effort to compete with growing cloud rivals in the field of artificial intelligence (AI). Under the deal, Amazon’s employees and cloud customers will gain early access to Anthropic’s technology, which they can integrate into their businesses. The San Francisco-based startup has also committed to primarily relying on Amazon’s cloud services and training its future AI models on proprietary chips purchased from Amazon.

The immediate investment from Amazon is $1.25 billion, with the option for an additional $2.75 billion in funding triggered by either party. While the exact stake that Amazon will own in Anthropic is undisclosed, Amazon stated that it will not gain a board seat and that its stake will be a minority position. This move by Amazon represents a significant response to challenges from cloud rivals Microsoft and Google, both of which have invested heavily in AI startups and technologies.

Microsoft, for example, has invested billions of dollars into its partnership with OpenAI, giving its customers special access to the startup’s AI technology. Google, meanwhile, has pioneered the development of AI and has invested in Anthropic’s fundraising efforts. Despite this investment from Amazon, Anthropic will maintain its ties with Google through the use of its custom chips and plans to make its technology available via Google Cloud and other platforms.

By investing in Anthropic, Amazon aims to meet the increasing demand for AI solutions, including chips that power AI applications. Anthropic has agreed to work on developing technology for Amazon’s Trainium and Inferentia chips. The CEO of Amazon Web Services, Adam Selipsky, stated that the partnership will benefit both companies, improving Anthropic’s models while enhancing Amazon’s chip technology and its AI infrastructure. Dario Amodei, CEO of Anthropic, emphasized that the funding will allow the company to prioritize safety and scale up its AI models.

Anthropic, founded by former OpenAI executives, is known for developing generative AI systems that can draft content as if a human created it. The company aims to train AI to adhere to moral values, differentiating its work in the field. With this investment from Amazon, Anthropic will bolster Amazon Bedrock, a service that allows users to build AI applications. Amazon customers will have early access to features from Anthropic, enabling them to customize their AI. Additionally, LexisNexis, a data analytics company, is working with Anthropic and Amazon to improve its legal search capabilities.

While Anthropic has yet to gain the same level of recognition as OpenAI, Amazon’s goal is to provide its customers with a wide range of AI solutions so that they have little reason to look elsewhere for cloud services. When asked if Amazon will invest in additional AI startups beyond Anthropic, Selipsky stated that he does not know what the future holds.

In conclusion, Amazon’s investment in Anthropic demonstrates its commitment to competing in the AI space, particularly against cloud rivals Microsoft and Google. By providing its employees and customers with access to Anthropic’s technology, as well as utilizing the startup’s expertise in developing AI models on proprietary chips, Amazon aims to strengthen its position in the cloud and AI industries.