Amazon is investing as much as $4 billion in the AI company Anthropic. They announced this move as Amazon boosts its competition with tech giants like Microsoft, Meta, Google, and Nvidia in the rapidly advancing AI field, seen by many as the upcoming big thing.
Amazon announced its first investment of $1.25 billion in Anthropic for a partial ownership. Anthropic, similar to Google's Bard and Microsoft-supported OpenAI, runs an AI chatbot that analyzes text. Additionally, Amazon has the choice to bump up its investment in Anthropic to a grand total of $4 billion.
Earlier in the year, TechCrunch revealed that Anthropic, backed by investors including Google, aims to gather up to $5 billion in the coming two years. Just recently, Anthropic introduced a premium subscription for their chatbot, Claude 2. They have ambitions to create a cutting-edge model, possibly named "Claude-Next", which they claim will be 10 times more potent than today's top AI, as per a 2023 investor presentation sourced by TechCrunch.
The startup warned that this advancement will demand a whopping billion dollars in the next year and a half. To put things in perspective, Microsoft has poured around $11 billion into OpenAI over time.
With Amazon, Anthropic has secured a well-funded strategic partner. Besides the financial support, Amazon can offer the computing strength needed to craft upcoming AI models and then assist in introducing and marketing these solutions to a vast number of cloud clients.
What does the investment deal say?
Under the investment deal, Amazon shared that Anthropic will primarily rely on its cloud behemoth, AWS, for vital tasks like safety research and developing foundational AI models. Additionally, Anthropic will utilize AWS's Trainium and Inferentia chips for the creation, training, and implementation of its upcoming core models. It's worth noting that Anthropic has been an AWS client since 2021.
In a statement, Amazon's CEO, Andy Jassy, expressed that through their intensified collaboration with Anthropic, they anticipate enhancing numerous customer experiences in both the immediate and distant future.
Andy Jassy stated, "Customers are buzzing about Amazon Bedrock, AWS's latest service that lets businesses use foundational models to create AI-driven applications. Paired with AWS Trainium, our AI training chip, our partnership with Anthropic is set to amplify the benefits these features offer to our clients."
Anthropic has some big names backing it, including Spark Capital, Salesforce, Sound Ventures, Menlo Ventures, and Zoom. So far, they've managed to gather an impressive $2.7 billion in funding. Back in May, they clinched a hefty $450 million in one round, putting their valuation around $5 billion. However, the specifics of Amazon's valuation of Anthropic in their recent investment remain undisclosed.
Teaming up with Anthropic enables Amazon, already making significant strides in AI, to further bolster its position in the rapidly expanding industry.
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