Amazon announced it has agreed to a deal to invest up to $4 billion in AI company Anthropic on Monday, with Anthropic set to use Amazon chips to build and distribute AI software. In return, Amazon promises to use Anthropic AI products in its devices such as Amazon Bedrock, a service for building AI.
Specifically, Amazon has committed an up-front $1.25 billion investment in Anthropic, which could increase to $4 billion depending on several factors. Anthropic is expected to work on AWS products with at least some of the investment money, and has committed to use AWS as its primary cloud provider.
Anthropic, a two year old company founded by former OpenAI employees Dario and Daniela Amodei, is best known for the Claude chatbot which it describes as “helpful, harmless, and honest,” as a “friendly, enthusiastic colleague or personal assistant who can be instructed in natural language to help you with many tasks.” Amazon is set to gain minority ownership of Anthropic following the deal.
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This comes at time that has been described as the “AI arms race,” which Amazon effectively joined in April 2023 when it announced it was introducing new AI tools for its Amazon Web Services (AWS) and expanding access to chips specifically made for AI software at cheaper prices than its competitors. Leading cloud companies AWS, Microsoft, and Google have each decided to center generative AI in their sales campaigns, spurred to do so by widespread attraction to ChatGPT and other labor saving or creative AI tools.
Meanwhile, Microsoft is spending triple of what Amazon is, having invested $13 billion into OpenAI. In 2022, Google parent company Alphabet spent $39.5 billion on research and development, up from $31.6 billion in 2021. It saw a massive drop in its market value when a live demonstration of its new chatbot Bard went wrong. The bot incorrectly answered a question, leading investors to pull nearly $100 billion from the company in February 2023.
Google put nearly $300 million into Anthropic in March 2023 and had Anthropic agree to make Google’s cloud unit its default infrastructure provider. Anthropic additionally agreed to spend $900 million on Google cloud services over several years. Whether Amazon’s influence will crowd out Google’s is yet to be seen. What Anthropic is showing, however, is that it does not plan to become exclusive to one investor as OpenAI has become with Microsoft.
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