10 Oct 2023
Amazon has unveiled a substantial investment of up to $4 billion in Anthropic, an emerging AI startup, in a move aimed at intensifying its competition with tech giants such as Microsoft, Meta, Google, and Nvidia in the rapidly expanding AI sector, which many experts believe could be the next major frontier in technology.
Initially, Amazon is committing $1.25 billion to acquire a minority stake in Anthropic, a company known for its AI-powered text-analyzing chatbot, Claude 2, similar to Google's Bard and Microsoft-backed OpenAI. As part of the agreement, Amazon retains the option to increase its investment in Anthropic to reach the $4 billion mark.
The startup, which recently introduced its first premium subscription plan for Claude 2, has set its sights on developing a groundbreaking AI model tentatively called "Claude-Next," expected to be ten times more powerful than existing AI models, according to an investor presentation from 2023 obtained by TechCrunch.
However, Anthropic cautioned that achieving this goal would necessitate an expenditure of one billion dollars over the next 18 months, noting that Microsoft has invested up to $11 billion in OpenAI over the years. Amazon's involvement provides Anthropic with a deep-pocketed strategic partner capable of delivering the computational resources required to build future AI models and facilitate their distribution to a wide range of cloud customers.
As part of their investment agreement, Anthropic will heavily rely on Amazon's cloud computing behemoth, AWS, as the primary cloud provider for critical tasks, including safety research and the development of future foundation models. Anthropic will also harness AWS Trainium and Inferentia chips for building, training, and deploying its upcoming foundation models, a partnership that has been in place since 2021.
Amazon's CEO, Andy Jassy, expressed optimism about the collaboration, stating that it could "enhance many customer experiences, both in the short and long term." Jassy highlighted Amazon's offerings like Amazon Bedrock, a new managed service by AWS enabling companies to build generative AI applications on top of foundation models, and AWS Trainium, the AI training chip, which he believes will deliver even greater value through collaboration with Anthropic.
Anthropic, supported by investors like Spark Capital, Salesforce, Sound Ventures, Menlo Ventures, and Zoom, has so far secured a total of $2.7 billion in funding. In May of the current year, the startup achieved a valuation of approximately $5 billion during a funding round that raised $450 million. The exact valuation placed on Anthropic by Amazon's recent investment remains undisclosed.
This deal empowers Amazon, already making strides in the AI field, to bolster its position in the rapidly expanding industry.
Dario Amodei, CEO and co-founder of Anthropic, expressed his confidence in the company's technological future during a recent TechCrunch Disrupt event, stating, "The last 10 years have seen a remarkable increase in the scale at which we train neural nets, and we keep scaling them up, with improved results each time. That's why I believe that what we'll witness in the next 2, 3, and 4 years will far surpass what we see today."