In a bid to rival burgeoning cloud competitors in the field of artificial intelligence, Amazon announced on Monday its commitment to inject up to $4 billion in cash into the prominent startup Anthropic. The e-commerce giant intensifies its competition with Microsoft, Meta, Google, and Nvidia in the rapidly expanding domain that numerous tech experts consider a potential future frontier.
Amazon has disclosed its plan to make an initial investment of $1.25 billion for a minority share in Anthropic, a company similar to Google’s Bard and Microsoft-supported OpenAI, known for its AI-driven text analysis chatbot. Under the agreement, Amazon also retains the option to elevate its investment in Anthropic to a maximum of $4 billion.
Both companies refrained from disclosing the specific percentage of Anthropic that Amazon would acquire or the current valuation of the startup, which was previously estimated to be in excess of $4 billion. Amazon clarified that it would not secure a seat on the board and emphasized that its ownership stake would constitute a minority position.
As part of the agreement, Amazon’s staff and cloud clients will enjoy early access to Anthropic’s technology for integration into their operations. Additionally, the startup has pledged to predominantly utilize Amazon’s cloud services and employ Amazon’s proprietary chips for training its future AI models.
Earlier this year, Anthropic, also backed by Google, announced its intention to secure up to $5 billion in funding over the next two years. They also recently unveiled a premium subscription plan for their chatbot Claude 2 and have ambitious plans to develop a cutting-edge AI model, tentatively named “Claude-Next,” which aims to be ten times more powerful than the most advanced AI models available today, as outlined in their 2023 investor presentation.
However, Anthropic noted that achieving this milestone would necessitate an expenditure of $1 billion within the next 18 months, a significant investment considering that Microsoft has committed up to $11 billion in support of OpenAI’s, ChatGPT.
Anthropic has secured Amazon as a well-funded strategic investor, which not only brings financial backing but also access to computational resources essential for developing advanced AI models. Furthermore, Amazon can assist in identifying and marketing these AI solutions to a wide range of cloud customers.
This announcement marks one of Amazon’s most significant responses to the competitive pressure posed by Microsoft and Google, both of which have made strides in AI development this year. It also underscores the continued efforts of cloud companies to establish partnerships with AI startups that are reshaping the landscape of their industry.
Starting in 2019, Microsoft has invested substantial sums in its collaboration with OpenAI, the creator of ChatGPT, granting its customers exclusive access to the startup’s text-generation and image-creation technology.
Google has been at the forefront of advancing this area of AI and solidified its involvement by participating in Anthropic’s $450 million funding round in May, indicating a continued partnership. In the case of Amazon, this latest agreement could lead to increased demand, particularly for AI-enabled chips.
Anthropic has committed to collaborating on the development of technology for Amazon’s Trainium and Inferentia chips, among other projects.
Headed by its CEO, Dario Amodei, Anthropic specializes in generative AI capable of creating human-like content while prioritizing ethical considerations. They’ve maintained an ongoing partnership with Google, using Google’s custom chips and planning to offer their technology through Google Cloud.
However, their recent deal with Amazon Bedrock aims to boost Amazon’s AI service by providing early access to Anthropic’s features for Amazon customers. This collaboration will also enhance the usage of Anthropic’s AI model, Claude 2, particularly for enterprise applications.
Customers like LexisNexis, Bridgewater Associates, and Lonely Planet are already working with Anthropic and Amazon to enhance their services. While Anthropic is not as well-known as OpenAI, Amazon’s strategy is to offer a wide range of AI models to retain customers within their cloud services ecosystem.
(Source: Jeffrey Dastin | Kenneth Li | Chizu Nomiyama | Reuters | Adam Satariano | New York Times | Manish Singh | TechCrunch)
