Amazon to invest $4 billion in AI startup Anthropic

November 16, 2023
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Amazon to invest $4 billion in AI startup Anthropic

Amazon will invest up to $4 billion in San Francisco-based startup Anthropic as the tech and e-commerce giant attempts to become a major player in the artificial intelligence sector.

The investment, which would also see Amazon getting a minority stake in Anthropic, is part of a wider collaboration between the two entities that aims to accelerate their respective AI-related developments, the companies said in a Sept. 25 joint statement.

As part of the deal, Amazon’s employees and cloud customers will gain early access to Anthropic’s technologies, including “features for model customization and fine-tuning capabilities.” The firm added that its engineers, including those who work outside of Amazon Web Services (AWS), will have access to Anthropic’s models.

Meanwhile, Anthropic will move most of its software to AWS data centers and use the cloud computing firm’s chips to train the models the AI company uses to power its services, such as chatbots and other applications. Anthropic also agreed to work on developing technology for Amazon’s in-house Trainium and Inferentia chips. Besides gaining access to Amazon’s computing power, Anthropic will also receive a financial infusion to cover the costs of running and training giant AI models.

The statement didn’t state how many shares of Anthropic Amazon would own following the investment or the startup’s updated valuation, which was last estimated at more than $4 billion. Since Amazon would only have a minority position, it said it would not gain a board seat.

Amazon’s latest investment, if it falls through, would represent the company’s biggest answer to Microsoft and Google’s AI moves. Notably, the company tends to develop its own products instead of relying on external technology or acquiring businesses with high valuations.

The deal also shows the trend of cloud companies vying for ties with AI startups to reshape their industry. Since 2019, Microsoft has invested billions in its partnership with ChatGPT maker OpenAI, providing exclusive access to the startup’s technology for writing and generating images. Meanwhile, Google has helped pioneer this segment of AI. In May, it invested more than $300 million in Anthropic.

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