$4B Amazon Investment in Anthropic Advances AI Race

Amazon is attempting to close the artificial intelligence (AI) gap with Google and Microsoft by investing up to $4 billion in San Francisco-based startup Anthropic, the firm behind the AI assistant Claude, a large language model (LLM) that competes with OpenAI’s ChatGPT.

In an interview with Reuters on Monday, the CEOs of Amazon’s cloud division and Anthropic said the initial investment will be $1.25 billion, with the option of raising an additional $2.75 billion to train its LLMs on Amazon-purchased CPUs.

Amazon will gain access to Anthropic’s AI technology and incorporate it into its cloud services offerings while taking minority ownership in the company.

Anthropic, which is led by CEO Dario Amodei, reached a similar agreement with Google’s cloud division earlier this year.

“Customers are quite excited about Amazon Bedrock, AWS’s new managed service that enables companies to use various foundation models to build generative AI applications on top of, as well as AWS Trainium, AWS’s AI training chip, and our collaboration with Anthropic should help customers get even more value from these two capabilities,” said Amazon CEO Andy Jassy.

Amazon, which has trailed Google and Microsoft in this year’s frenetic rush to develop and deploy AI technology, could benefit from the Anthropic investment, particularly in the cloud arena.

While “most people are talking about the application layer, specifically what OpenAI has done with ChatGPT,” Jassy told investors in early August, “further layers and investment opportunities remain.”

Anthropic has raised a total of $2.7 billion to date, with investors including Spark Capital, Salesforce, Sound Ventures, Menlo Ventures, and Zoom. When it received $450 million in capital in May of this year, the business was valued at around $5 billion.