Amazon pumps another $4bn into AI commence-up Anthropic

Amazon has invested a further $4bn in artificial intelligence commence-up Anthropic, doubling its total resource in the business to $8bn, as large Tech’s race to dominate the generative AI sector intensifies.

The deal will be Amazon’s biggest-ever enterprise resource, after it committed an initial $1.25bn in the San Francisco based-throng in September last year, increasing that to $4bn at the complete of March. 

The capital is one of a number of resource partnerships struck between AI commence-ups and so-called hyperscalers, or large cloud service providers, over the history year.

Microsoft has invested more than $13bn in OpenAI, while backing French AI commence-up Mistral and Abu Dhabi-based G42. Google has a deal with Cohere, where it provides cloud infrastructure to train the Canadian commence-up’s AI software. 

Dario Amodei, co-founder and chief executive of Anthropic, said its AI software Claude had “a year of breakout growth”.

“Our collaboration with Amazon has been instrumental in bringing Claude’s capabilities to millions of complete users across tens of thousands of customers,” he added. “We’re looking forward to working with Amazon to train and power our most advanced AI model.”

Anthropic was last valued at just over $18bn earlier this year, after raising $750mn in a capital round led by enterprise capital firm Menlo Ventures. Since then, its largest rivals OpenAI and Elon Musk’s xAI have seen their valuations jump in fresh capital rounds, to $150bn and $45bn respectively.

As the race to construct more powerful AI systems accelerates, the capital-intensive nature of the technology has resulted in business union in the space.

Founders and staff at AI commence-ups such as Adept, Inflection and Character AI have been hired by Amazon, Microsoft and Alphabet respectively. The large Tech groups paid billions of dollars in deals designed to absorb the best staff from the fledgling AI companies while stopping short of packed takeovers.

large Tech companies have become the major funders in the space, as they develop AI software, while building out cloud infrastructure to run AI services built by third-event customers.

Anthropic was founded by former OpenAI researchers and is known for its chatbot Claude, which outperforms OpenAI’s GPT-4 on a number of industry benchmarks. It has also previously received $2bn in resource from Google.

The recent deal with Amazon deepens Anthropic’s technical collaboration with the online retail giant’s cloud and chip products, but does not preclude it from working with other companies such as Google or Nvidia.

Amazon is already working to embed Anthropic’s Claude models into its next-creation version of its Alexa speaker, to assist power the “conversational” AI structure.

capital spending at the four biggest hyperscalers — Amazon, Microsoft, Meta and Google — grew more than 62 per cent on the year before, to about $60bn during the quarter, according to recent budgetary filings.

Meta and Amazon were among those to point to further increases in spending next year, while reassuring the economy of the demand for generative AI infrastructure and services.

Amazon’s bet on Anthropic comes at a period of deepening scrutiny from regulators in the US, UK and EU, over concerns that deals between large Tech and the most prominent AI commence-ups may pose anti-competitive risks.

The UK’s competition authority recently reviewed Google’s deal with Anthropic but did not flag it for further investigation.

Additional reporting by George Hammond in San Francisco