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Amazon’s Big Move in the AI Race: Investing $4 Billion in Anthropic

SAN FRANCISCO, Sept 25 (Reuters) – Amazon.com  on Monday said it will invest up to $4 billion in cash in the high-profile startup Anthropic, in its effort to compete with growing cloud rivals on artificial intelligence.

Amazon’s workers and cloud users will get first dibs on Anthropic’s tech in this agreement. They can use this tech to improve their own businesses. The San Francisco startup will mainly use Amazon’s cloud services and their special chips to train their AI models in the future.

In the deal, Anthropics technology will have special access to Amazon’s employees and cloud customers. They can use it in their own companies. The San Francisco company will also use Amazon’s cloud services a lot, especially for training their new AI models. They’ll buy a bunch of special computer chips from Amazon for this.

The leaders of Amazon’s cloud division and Anthropic said in a joint interview that they’re putting $1.25 billion into a project right away. They also mentioned that either of them can ask Amazon for an extra $2.75 billion in funding if needed.

They chose not to disclose the startup’s increased valuation, which was previously estimated at more than $4 billion, or how much of Anthropic Amazon would now hold. Amazon said that its interest was a minority one and that it would not be given a board seat.

This is Amazon’s big move to compete with smaller cloud companies like Microsoft and Google. These smaller companies have been getting into AI recently. This deal shows that big cloud companies are trying to work with AI startups to stay competitive.

Microsoft started working closely with OpenAI in 2019. They gave OpenAI lots of money to help them create cool writing and picture-making tools. These tools were only available to Microsoft’s special customers.

 

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