Amazon boosts AI play with additional $4B investment in Anthropic

By Angela Harmantas

Amazon boosts AI play with additional $4B investment in Anthropic

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Amazon.com Inc (NASDAQ:AMZN) is putting another $4 billion into artificial intelligence startup Anthropic, it said on Friday, following a similar $4 billion investment earlier this year.

As part of the previous agreement, Anthropic committed to using Amazon Web Services (AWS) data centers and incorporating AWS-designed AI chips into its operations.

In a blog post, Anthropic confirmed that AWS will remain its primary cloud and training partner, underscoring the strengthened collaboration.

"We plan to use Amazon's AI chips to develop our most advanced models," Anthropic stated, adding that Amazon will retain a minority stake in the company.

For Amazon, the move reinforces its commitment to the burgeoning AI sector and its bid to compete with tech giants like OpenAI and Google.

Founded in 2021 by former OpenAI employees, Anthropic has emerged as a significant competitor to its former parent company. Its Claude family of AI chatbots is considered one of the strongest alternatives to OpenAI's ChatGPT.

Through its partnership with Anthropic, Amazon offers Claude models on the AWS marketplace.

But Anthropic's partnerships with major tech companies, including Amazon and Google, have drawn regulatory scrutiny. The UK's competition watchdog recently cleared Amazon and Google's prior investments in the startup. However, the U.S. Department of Justice is seeking to unwind Google's deal with Anthropic, reflecting broader concerns about the consolidation of power in the AI sector through large investments and cloud computing partnerships.

Amazon's heightened involvement in Anthropic comes amid a wave of investment in AI. OpenAI, a leader in the space, raised $6.6 billion in funding in October, achieving a valuation of $157 billion. Elon Musk's xAI is also making strides, reportedly seeking funding at a $40 billion valuation.

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