Amazon has announced that it will invest up to $4 billion in Anthropic, an artificial intelligence (AI) startup. This move highlights the increasing investments in the AI market by tech giants, as they seek to capitalize on its rapid growth. The deal involves Anthropic using Amazon Web Services as its primary cloud provider and Amazon’s custom chips for its AI software. In return, Amazon will incorporate Anthropic’s models and software across its business. The initial investment by Amazon will be $1.25 billion, with the potential for it to grow to $4 billion depending on certain conditions. Additionally, Amazon will hold a minority stake in Anthropic. This agreement aims to advance generative AI, which refers to technology that can create content from simple descriptive phrases.
The investment in Anthropic follows a similar trend seen in the tech industry this year, with companies racing to adopt generative AI into their business. This rush has been sparked by the success of OpenAI’s ChatGPT. In January, Microsoft invested $10 billion in OpenAI and established a partnership with the startup. Anthropic, founded in 2021 by former OpenAI employees, offers an AI assistant called Claude that provides human-like responses to prompts. Amazon’s move to invest in Anthropic indicates its pursuit of Microsoft in the development of AI products. Amazon had previously launched its Amazon Bedrock offering in April, which allows users of its cloud-computing service to build generative AI applications. This latest deal with Anthropic signals a newfound urgency in Amazon’s strategy to integrate generative AI into Amazon Web Services.
The investment by Amazon in Anthropic is seen as a potential catalyst for the adoption and deployment of additional generative AI capabilities among AWS customers, addressing investor concerns that Amazon has been less proactive in this area compared to its peers. Furthermore, Amazon recently announced its plans to leverage generative AI to enhance the interactivity of its Alexa smart-home devices. Following a challenging year in 2022, Amazon stock has experienced a 54% increase in value this year.