Amazon To Invest Up To USD 4 Billion with Anthropic To Bolster Its AI Capabilities By CIOTechOutlook Team

Amazon To Invest Up To USD 4 Billion with Anthropic To Bolster Its AI Capabilities

CIOTechOutlook Team | Monday, 25 September 2023, 08:43 IST

Amazon.com announced a $4 billion cash investment in the high-profile startup Anthropic in order to compete with increasing cloud rivals in artificial intelligence. As part of the agreement, Amazon workers and cloud customers will have early access to Anthropic technology, which they can incorporate into their enterprises. The San Francisco-based business also pledged to using Amazon's cloud services exclusively, including training its future AI models on massive quantities of custom chips purchased from the online retailing and computing behemoth.

The CEOs of Amazon's cloud division and Anthropic said in a joint interview that the initial investment will be $1.25 billion, with any party having the authority to trigger an additional $2.75 billion in funding from Amazon. They declined to say how much of Anthropic Amazon currently owns or the startup's revised worth, which was recently estimated at more than $4 billion. Amazon stated that it would not be given a board seat and that its shareholding was insignificant.

The news represents perhaps Amazon's biggest answer yet to challenges from Microsoft and Alphabet's Google, smaller cloud rivals that have marketed or developed powerful AI this year. The deal also shows ongoing maneuvering by the cloud companies to secure ties with AI startups reshaping their industry, as per economic times.

Microsoft has invested billions of dollars in its collaboration with ChatGPT inventor OpenAI since 2019, providing its clients with exclusive access to the startup's prose-writing and image-generation capabilities. Meanwhile, Google helped pioneer this branch of AI and funded in Anthropic's $450 million financing in May, a partnership that the startup says will continue.

The agreement may increase demand for Amazon's products, particularly AI chips. Anthropic has agreed to collaborate on the development of technologies for Amazon's in-house Trainium and Inferentia chips, for example.