Amazon.com (AMZN.O), to compete with increasing cloud rivals on artificial intelligence, said on Monday that it will invest up to $4 billion in cash in the high-profile company Anthropic. This move comes as part of Amazon’s aim to expand its market share in cloud computing.
As part of the agreement, Amazon’s employees and cloud customers will be given early access to technologies developed by Anthropic, which they can then implement into their enterprises. The San Francisco-based business has also pledged to rely mostly on the cloud services provided by Amazon. As part of this commitment, the company will train its future artificial intelligence models on massive custom chips purchased from the online retailing and computing giant.
The CEOs of Amazon’s cloud business and Anthropic announced in a joint interview that the immediate investment will be 1.25 billion dollars, with any party having the right to activate a further 2.75 billion dollars in funding from Amazon.
They declined to comment on how much of Anthropic Amazon would now control or provide an up-to-date value of the business, which was previously believed to be worth more than $4 billion. Amazon has stated that it will not be granted a seat on the board of directors and that its shareholding is equivalent to a minority position.
This announcement is likely Amazon’s most significant response to the difficulties posed by smaller cloud competitors such as Microsoft (MSFT.O) and Alphabet’s (GOOGL.O) Google, who have marketed or created sophisticated AI this year. Additionally, the transaction demonstrates continued maneuvering by cloud providers to seek relationships with AI startups transforming their sector.
Since 2019, Microsoft has invested billions of dollars into collaborating with OpenAI, which developed ChatGPT. As a result of this investment, Microsoft can provide its clients access to the image-generating and text-writing technologies developed by the startup.
Meanwhile, Google is credited with helping to pioneer this area of AI. In May, Google invested in Anthropic’s $ 450 million financing, and the firm has stated that their partnership will not end anytime soon.
The transaction announced on Monday might mean an increase in demand for Amazon, notably for the processors that enable AI. For example, Anthropic has promised to contribute to the research and development of technologies for Amazon’s internally developed Trainium and Inferentia chips.
The Chief Executive Officer of Amazon Web Services, Adam Selipsky, stated that the agreement “will help make Anthropic’s models better, will help make our chip technology and our AI infrastructure better.”
According to Dario Amodei, the Chief Executive Officer of Anthropic, his firm “has obtained the money in a way that allows it to prioritize safety” and “allows us to continue to scale up our models.”
STILL DEPENDENT ON GOOGLE
Anthropic is one of several businesses developing what is known as generative AI. These computer programs can write information as if a human being wrote it. Anthropic was formed by former executives of OpenAI, including Amodei. Training artificial intelligence to conform to moral norms has been one of Anthropic’s primary goals in this line of work.
Amodei chose not to comment on whether or not its most recent round of financing was competitive.
According to what he stated, Anthropic is keeping the arrangement it established with Google back in February. Anthropic utilizes special chips developed by Google, and the company intends to make its technology accessible via Google Cloud and other platforms.
However, through the transaction on Monday, Anthropic is providing a boost to Amazon Bedrock, a service that has attracted thousands of customers to begin developing AI applications.
Customers of Amazon will have early access to services provided by Anthropic, such as the option to tailor their artificial intelligence. In the words of Selipsky, “both companies are committing that, for many years to come, future versions of Claude will be available on Amazon Bedrock, and that’s important.”
The Claude 2 artificial intelligence model from Anthropic can respond to unusually big cues, making it suitable for analyzing lengthy legal or corporate documents.
According to Amodei, the arrangement “allows us to work more closely to drive enterprise usage for Claude,” which he claimed constituted the majority of the demand placed on Bedrock up to this point.
According to Amodei, the data analytics giant LexisNexis is collaborating with Anthropic and Amazon to enhance the “intelligent” capabilities of its legal search capabilities. In addition, he mentioned Bridgewater Associates and Lonely Planet as some of his other clients.
Anthropic has not yet achieved the same brand awareness or usage level as OpenAI. This firm was responsible for developing the GPT-4 model and ChatGPT, which is currently one of the most rapidly expanding software programs in the annals of computer history.
Amazon’s goal has been to provide clients with a comprehensive selection of AI models so they have fewer reasons to search for cloud services elsewhere.
When asked if Amazon might invest in other artificial intelligence businesses besides Anthropic, Selipsky responded, “I honestly don’t know what the future will hold.”
