Amazon Increases Its Investment in Anthropic AI to $4 Billion

Amazon has added $2.75 billion to its initial September 2023 investment of $1.25 billion in Anthropic, completing its announced $4 billion stake in the artificial intelligence startup formed in 2021 by former members of OpenAI. As part of the resulting strategic collaboration, Anthropic’s most powerful models, including the Claude 3 series, are available on Amazon Bedrock, a service providing fully managed foundation models. Anthropic is using Amazon Web Services as its primary cloud provider and Amazon says Anthropic will use AWS Trainium and Inferentia chips “to build, train, and deploy its future models.”

Amazon reports its investment gives it “a minority ownership position in Anthropic,” according to the company’s news announcement. The agreement marks Amazon equipping itself “to compete with Microsoft, Google and others in the AI arms race,” writes The Wall Street Journal. In October, Google agreed to invest as much as $2 billion in Anthropic.

WSJ notes Amazon’s spend is the largest at arm’s length in another company since launching in 1994. Though to put Amazon’s spending in perspective, the company acquired Whole Foods for $13.7 billion in cash in 2017. In 2021 it acquired MGM for $8.5 billon. If regulatory scrutiny was not an issue, there is a good chance that Amazon, which reported more than $30 billion in profit in 2023, would be purchasing Anthropic outright.

Amazon describes Anthropic’s Claude 3 family of models as having “near-human levels of responsiveness, improved steerability and accuracy, and new vision capabilities,” with Anthropic’s most advanced AI, the Claude 3 Opus model family, outperforming OpenAI’s GPT-4 “in the areas of reasoning, math, and coding.”

Microsoft has committed to invest $13 billion for a 49 percent stake in OpenAI, and WSJ says “more than $29 billion was invested in generative AI companies last year, according to research firm PitchBook.”

The investments “can be quite lucrative for the tech companies, which charge the AI startups to use the cloud-computing services they need to run their products,” WSJ reports, citing people familiar with the matter as saying the AI firm has reciprocally “committed to spend $4 billion on Amazon’s cloud platform over the next five years.”

Bloomberg reports that Amazon “plans to spend almost $150 billion in the coming 15 years on data centers” as it sets up the cloud-computing infrastructure to handle anticipated demand for artificial intelligence applications.

“The spending spree is a show of force as the company looks to maintain its grip on the cloud services market, where it holds about twice the share of No. 2 player Microsoft,” writes Bloomberg, noting that sales growth slowed to a record low at AWS last year “as business customers cut costs and delayed modernization projects.”

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