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Amazon Commits to AI Race, Investing Up to $4bn in Anthropic

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Amazon is pushing its AI agenda and taking a stake in Anthropic with a planned $4 billion investment in the startup as businesses continue to turn to AI tools for investment opportunities.

The e-commerce firm made the announcement on Sept. 25 that it would pour up to $4 billion into the AI firm, giving them a minority ownership stake in Anthropic.

The two companies have indicated the immediate investment will be $1.25 billion, according to Dailysabah, with either party “having authority to trigger another $2.75 billion in funding by Amazon.”

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Catching up

The move by Amazon is to stay in the AI game, currently dominated by generative AI. The boom in generative AI came after the launch of ChatGPT by OpenAI, which went viral within weeks of its release to the market in November 2022.

For Amazon, the move is to keep pace with competitors OpenAI, Microsoft, and Google that are currently dominating the generative AI industry and already have their chatbots ahead of the e-commerce firm.

Now the two companies are joining forces in this partnership to push forward generative AI, in which Anthropic will select Amazon Web Services (AWS) as its primary cloud provider.

The core models, according to CNBC reports, are large AI programmes trained on vast amounts of data. This is to enable them to solve a wide range of tasks.

“We have tremendous respect for Anthropic’s team and core models,” explained Amazon CEO Andy Jassy in a company statement.

“I believe we can help improve many customer experiences, in the short and long term, through our deeper collaboration,” he added.

Also read: USA’s Pennsylvania and Virginia Issue AI Executive Orders

Generative AI takes the money

The success of ChatGPT ignited interest in chatbots and sparked the development of rivals and imitators. The focus shifted towards generative AI chatbots.

Amazon’s decision is nothing new and not surprising. According to RTE, the wealthy investors of Silicon Valley have poured lots of money into the AI industry as they “seek to find a killer application to justify the interest.”

In China, where ChatGPT is restricted, tech giants Tencent and Baidu have developed their own chatbots, which they claim can rival ChatGPT.

Apple was also reportedly developing its own chatbot, Apple GPT, to rival OpenAI’s ChatGPT and Google’s Bard.

Yourstory reports that investments in the tech industry have shifted towards AI on the back of its transformative power. Venture capitalist firms are increasingly turning to AI tools to scout for new opportunities.

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User-centric

Announcing the transaction, Amazon has placed emphasis on the benefits the deal will have for its cloud computing arm, AWS. The deal also promises that Anthropic’s chatbot, Claude,

“will help customers of all sizes develop new generative AI-powered applications to transform their organizations.”

The latest investment deal will also allow Anthropic to use chips from Amazon to develop its next models.

Anthropic was formed about two years ago and recently launched Claude 2, its chatbot. The company’s founders, siblings Dario and Daniela Amodei, were part of OpenAI but left the company in 2021 over concerns that the AI firm had become too commercial.

The pair then started their own company to focus on advancing AI safety.

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