Amazon doubles down on AI, invests additional $4 billion in Anthropic

Amazon has bolstered its investment in AI startup Anthropic with an additional $4 billion, doubling its financial backing as it seeks to cement its position in the competitive generative artificial intelligence (GenAI) landscape. Known for its AI chatbot Claude, Anthropic revealed on Friday that Amazon’s latest contribution, like the previous one, is structured as convertible notes and will be disbursed in phases, starting with $1.3 billion.

Despite the increased funding, Amazon remains a minority investor in the San Francisco-based startup. Sources indicate Anthropic is also engaging with other potential investors to raise additional capital, buoyed by the endorsement from Amazon. The startup declined to comment on the fundraising efforts.

Amazon is competing with Microsoft and Alphabet’s Google in the generative AI domain, where these tech titans are aggressively rolling out AI-powered tools for cloud customers. Amazon Web Services (AWS), the company’s cloud division, has emerged as a critical partner for Anthropic, acting as a significant distributor for its latest AI models.

This move highlights the billions of dollars tech giants are pouring into AI startups to ride the wave of generative AI, a technology that captured global attention with the launch of OpenAI’s ChatGPT in late 2022. Microsoft-backed OpenAI recently raised $6.6 billion, potentially valuing the company at $157 billion, a testament to the surging interest in the field.

Amazon’s partnership with Anthropic extends beyond financial investment. The startup plans to train and deploy its foundational AI models using Amazon’s in-house Trainium and Inferentia chips. The labour-intensive process of training AI models demands high-performance processors, making access to cutting-edge chips a top priority for startups in the space.

Currently, Nvidia dominates the market for AI processors, with Amazon among its major customers. However, Amazon is working to lessen its reliance on third-party chipmakers by developing its own processors through Annapurna Labs, a subsidiary that Anthropic is collaborating with to advance chip technologies.

Anthropic, co-founded by siblings Dario and Daniela Amodei, both former OpenAI executives, is no stranger to partnerships with tech giants. Last year, Alphabet invested $500 million into Anthropic, with a pledge to funnel an additional $1.5 billion over time. The startup also relies on Google Cloud services for parts of its operations.

Meanwhile, Amazon continues to develop its own AI model, reportedly code-named “Olympus,” though it has yet to be released.