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Amazon has announced a major investment of up to $4bn in Anthropic, an artificial intelligence start-up, intensifying its competition with Microsoft, Google, and Nvidia in attracting AI companies to its technology.
The agreement involves Amazon initially investing $1.25bn for a minority stake in Anthropic, with the potential to increase the investment to $4bn later on.
This move aims to establish a close relationship with a prominent AI start-up, similar to Microsoft’s alliance with OpenAI, the group behind ChatGPT. As part of the agreement, Anthropic will utilize Amazon’s cloud computing platform and dedicated AI chips to develop its models.
AI start-ups are in a race to secure the expensive chips and data center resources needed to build the latest large language models. Anthropic, valued at nearly $5bn earlier this year, is one of the top contenders, along with Inflection AI, which raised $1.3bn from Microsoft and Nvidia, and Cohere, which raised $270mn from Nvidia and others.
While Anthropic previously partnered with Google for its chips and cloud, the new alliance with Amazon Web Services signifies a shift. Amazon aims to position its Trainium and Inferentia chips as viable alternatives to Nvidia’s processors for training and running generative AI models.
Under its partnership with OpenAI, Microsoft invested billions and became its exclusive cloud provider. Although Amazon’s deal with Anthropic has similarities, it is not an exclusive arrangement. Amazon seeks to offer customers the most choice and security rather than exclusivity.
Amazon will become Anthropic’s primary cloud provider for mission-critical workloads. However, Anthropic maintains its arrangement with Google as its preferred cloud provider.
Jim Hare, a technology analyst at Gartner, believes that Amazon’s deal with Anthropic will demonstrate that Nvidia’s chips are not the only option for AI developers. This may dispel the perception that Amazon is lagging behind in AI.
Anthropic was founded by a group of former OpenAI employees, led by Dario Amodei, following differences over the direction of the company. The valuation of the investment and Amazon’s ownership stake will be determined in a later funding round.
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