Amazon Bets $4B On AI Startup Company

On Wednesday, Amazon announced that it had increased its investment in Anthropic by $2.75 billion. Anthropic is a startup that competes with OpenAI and Google to develop advanced artificial intelligence systems.

Anthropi became Amazon’s most significant artificial intelligence partner six months ago when the e-commerce giant invested $1.25 billion. At the time, Amazon said it could have invested up to $4 billion. According to financial reports, it has until March 31st to accomplish this.

Nonetheless, the increased funding demonstrates the massive investments made by major giants in artificial intelligence and highlights the significant financial backing that Anthropic needs to stay up with its competitors.

Anthropic has divested itself of a contentious investment as it draws nearer to Amazon. The insolvent cryptocurrency exchange FTX was able to sell its interest in Anthropic last week after a federal court authorized the sale. The artificial intelligence startup received $500 million in investment in 2021 from FTX, giving it an approximate 8% share. In a year, Anthropic’s worth increased thrice to $15 billion.

In 2021, a team of academics from OpenAI—the same organization behind the ChatGPT chatbot—launched Anthropic. Many scholars were worried about OpenAI’s increasing ties to Microsoft as the two companies entered a $13 billion relationship.

It takes a lot of money to build the foundation systems for generative AI, which is why Anthropic has been continuously raising cash. They need to pay people to buy computers.

There is more to Amazon’s investment in Anthropic than meets the eye. Gaining access to AI systems and promises to provide processing power are part of it, much as Microsoft’s investment in OpenAI. However, the high-value purchases that may necessitate an antitrust investigation are not addressed. To determine if massive AI acquisitions harm competition, the Federal Trade Commission has launched an investigation.

As an integral aspect of the collaboration, Anthropic committed to developing its AI with the help of Amazon-developed specialized computer chips. According to Amazon, the company is looking to Anthropic to assist with AI research and development and to work on creating customized chips.