Amazon has made a significant move to step up its AI capabilities with a multimillion-dollar deal to invest in the high-profile startup Anthropic. The investment, which could reach up to $4 billion, is part of Amazon’s strategy to compete with other cloud rivals in the field of artificial intelligence.
Under the agreement, Amazon’s employees and cloud customers will gain early access to technology developed by Anthropic, allowing them to integrate it into their businesses. Additionally, Anthropic has committed to primarily using Amazon’s cloud services, including training its future AI models on proprietary chips purchased from the online retail giant.
The immediate investment by Amazon is set at $1.25 billion, with the potential for an additional $2.75 billion in funding. The CEOs of both Amazon’s cloud division and Anthropic declined to disclose the exact ownership stake Amazon would have in the startup or Anthropic’s updated valuation.
This deal represents Amazon’s most significant response so far to competition from Microsoft and Alphabet’s Google, who have both made strides in the development and marketing of powerful AI. Both companies have formed partnerships with AI startups in order to gain a competitive edge.
In 2019, Microsoft invested billions of dollars in a partnership with OpenAI, the creators of ChatGPT, which allowed its customers access to the startup’s cutting-edge technology. Meanwhile, Google has been at the forefront of AI development and showed its support for Anthropic in May by investing in their $450 million fundraise.
For Amazon, this deal with Anthropic could result in increased demand for the chips used to power AI. Anthropic has agreed to work on developing technology specifically for Amazon’s Trainium and Inferentia chips. Adam Selipsky, CEO of Amazon Web Services, believes that the collaboration will benefit both parties, stating that it “will help make Anthropic’s models better” and also enhance Amazon’s chip technology and AI infrastructure.
Anthropic, founded by former OpenAI executives, is focused on developing generative AI systems that can create content as if it were produced by a human. One of Anthropic’s differentiating factors is its commitment to training AI to adhere to moral values. Despite the partnership with Amazon, Anthropic is still maintaining its agreement with Google, using their custom chips and making its technology available through Google Cloud and other channels.
As part of the deal, Anthropic will contribute to the growth of Amazon Bedrock, a service that allows users to build AI applications. Amazon’s customers will have early access to Anthropic’s features, including the ability to customize their AI. This partnership is essential for ongoing enterprise usage of Anthropic’s AI model, Claude, which has already seen significant demand from customers like LexisNexis, Bridgewater Associates, and Lonely Planet.
By investing in Anthropic and integrating their technology into its own offerings, Amazon aims to provide customers with a wide range of AI models and minimize the need for them to seek alternative cloud services. When asked about potentially investing in more AI startups, Selipsky expressed uncertainty but acknowledged the importance of staying on the cutting edge of AI development.
This investment by Amazon underscores the increasing emphasis on AI in the industry and the intense competition between cloud companies to secure ties with AI startups. As the AI race continues, it will be interesting to see how Amazon leverages its investment in Anthropic to solidify its position in the rapidly evolving AI landscape.
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