Amazon invests a further $4bn in AI start-up Anthropic

San Francisco — Amazon.com pumped another $4bn into OpenAI competitor Anthropic, as the e-commerce giant goes up against Big Tech rivals in a race to capitalise on generative artificial intelligence technology.

This doubles Amazon’s investment in the firm known for its generative AI chatbot Claude, but it remains a minority investor, the start-up said on Friday. Similar to Amazon’s previous $4bn investment, it comes in the form of convertible notes and comes in phases, first at $1.3bn.

Anthropic is also in talks with additional investors to raise more capital on the back of Amazon backing, sources added, who requested anonymity for discussing private matters. Anthropic declined to comment.

Amazon, which has gradually established itself as Anthropic’s primary cloud partner, is fiercely competing with Microsoft and Alphabet’s Google to offer AI-powered tools for its cloud customers. Amazon Web Services is bringing significant revenue to Anthropic as a major distributor of its latest models.

“The investment in Anthropic is essential for Amazon to stay in a leadership position in AI,” said DA Davidson analyst Gil Luria.

The e-commerce company’s increased investment in Anthropic underscores the billions of dollars funnelled into AI start-ups over the past year, as investors look to cash in on a boom in the technology, which became popular with the launch of OpenAI’s ChatGPT in late 2022.

Microsoft-backed OpenAI raised $6.6bn from investors last month, which could value the company at $157bn and cement its position as one of the most valuable private companies in the world.

Anthropic plans to train and deploy its foundational models on Amazon’s Trainium and Inferentia chips. The intensive process of training AI models requires powerful processors, making securing pricey AI chips a top priority for start-ups.

“It (partnership) also allows Amazon to promote its AI services such as leveraging its AI chips for training and inferencing, which Anthropic is using,” Luria said.

Nvidia dominates the market for AI processors and counts Amazon among its long list of so-called hyperscaler customers.

Still, Amazon has been working to develop its own chips through its Annapurna Labs division, which Anthropic said it was “working closely with” to aid in developing processors. Amazon has also been trying to build its own AI model code-named “Olympus,” which it has not released.

Anthropic, cofounded by former OpenAI executives and siblings Dario and Daniela Amodei, said last year it had secured a $500m investment from Alphabet, which promised to invest another $1.5bn over time.

The start-up also uses Alphabet’s Google Cloud services as part of its operations.

Reuters