Amazon Invests Another $2.75 Billion on AI Startup Anthropic

On Wednesday, Amazon pledged $2.75 billion to artificial intelligence (AI)) startup Anthropic, increasing its investment to $4.00 billion.

Insiders claimed that the AI firm received a valuation of $18.40 billion, prompting the tech giant to increase its initial funding of $1.25 billion. However, Anthropic reiterated that the e-commerce platform will not receive a board seat, only retaining its minority stake.

According to tech specialists, the startup was one of the hottest additions to the generative AI (GenAI) arms race last year. In 2023, it closed five different investment agreements worth approximately $7.30 billion to accelerate the development of its Claude AI.

Amazon Web Services Vice President of AI Swami Sivasubramanian said the collaboration will take user experience to the next level. Sivasubramanian added that incorporating GenAI technology has become essential for any tech company to stay competitive.

The arrangement is the latest addition to a spending blitz among cloud service providers to improve their standing in the AI race. Last month, Google announced plans to spend $50.00 billion in capital expenditures to bolster the development of Gemini and other AI projects.

Furthermore, market experts reported that enterprise cloud spending rose to nearly $74.00 billion in last year’s fourth quarter. The increase drove cloud providers to expand their computing capacities and invest in improving existing technologies to accommodate large language models (LLMs).

Anthropic to Equip Amazon with Claude GenAI

Amazon expressed confidence that Anthropic can develop a GenAI system superior to the industry leader, Chat Generative Pre-trained Transformer (ChatGPT). Former executives Dario and Daniela Amodei founded the startup after leaving OpenAI on classing values and ideologies.

The brother and sister stressed that OpenAI tunnel-visioned on profits and forgot its roots as a non-profit organization. Thus, the siblings established an AI research and deployment company that prioritizes safety and responsibility above all else, including profits.

Dario led the team that developed OpenAI’s GPT-2 and GPT-3 LLMs, which immensely outperformed their GPT-1 predecessor. Earlier this year, Anthropic released Claude 3, which outperformed GPT-4 and Gemini Ultra on various benchmark tests.

The Seattle-headquartered tech giant intends to integrate Claude throughout its infrastructure to streamline operations.