Amazon Makes Record $2.75 Billion Investment in AI Startup Anthropic

Read Time:1 Minute, 53 Second

In an attempt to gain an advantage in the race against artificial intelligence, Amazon is making the largest outside investment it has made in its thirty years of existence.
The tech behemoth announced that it would invest an additional $2.75 billion in Anthropic, a San Francisco-based startup that is considered a leader in the field of generative artificial intelligence. OpenAI and ChatGPT are competitors of its foundation model and chatbot, Claude.
In September, the companies declared their first investment of $1.25 billion, with Amazon committing to invest up to $4 billion at that time. The announcement on Wednesday represents the second funding round for Amazon.
The company stated that Amazon will continue to hold a minority position in the business and will not have a seat on the Anthropic Board. According to a source, the deal was reached at the AI startup’s previous valuation of $18.4 billion.

Anthropic has closed five funding deals totaling approximately $7.3 billion in the last year. The company was founded by former research executives and employees of OpenAI, and its product is a direct competitor of OpenAI’s ChatGPT in both the enterprise and consumer markets.

The announcement of the Amazon investment comes a few weeks after Anthropic unveiled Claude 3, its most recent set of AI models, which the company claims to be its fastest and most potent to date. The most proficient of the company’s new models, according to industry benchmark tests like undergraduate-level knowledge, graduate-level reasoning, and basic mathematics, outperformed Google’s Gemini Ultra and OpenAI’s GPT-4.

Vice president of data and AI at AWS cloud provider Swami Sivasubramanian stated, “We believe our strategic collaboration with Anthropic will further improve our customers’ experiences and look forward to what’s next.” “Generative AI is poised to be the most transformational technology of our time.”

The latest action by cloud providers in a spending frenzy to maintain their lead in the AI race is that of Amazon. Additionally, this is Anthropic’s second capital structure update in as many weeks. According to a report from CNBC last week, crypto exchange FTX reached an agreement with a group of buyers to sell the majority of its stake in Anthropic, according to bankruptcy filings filed late on Friday.