Amazon

Anthropic gets a huge boost from Amazon's US$4 billion investment

The two companies announced that Amazon has committed to invest up to US$4 billion in the AI start-up Anthropic as the e-commerce giant intensifies competition with Microsoft, Meta, Google, and Nvidia in the quickly expanding industry that many engineers feel might be the next great frontier.

The e-commerce company announced that it will first spend US$1.25 billion for a minority position in Anthropic, which, like Google's Bard and Microsoft-backed OpenAI, runs a text-analyzing chatbot powered by AI. According to the agreement, Amazon has the option to boost its initial US$4 billion investment in Anthropic.

TechCrunch exclusively revealed earlier this year that Anthropic, which also has Google as an investor, intends to raise to US$5 billion over the next two years. According to a 2023 investor deck obtained by TechCrunch earlier this year, Anthropic, which launched its first consumer-facing premium subscription plan of chatbot Claude 2 earlier this month, plans to build a "frontier model” tentatively dubbed "Claude-Next" that is ten times more capable than today's most powerful AI.

However, the firm warned that this development will cost a billion dollars over the following 18 months. Anthropic has found a deep-pocketed strategic investor in Amazon, which can also give it with computational capacity to construct future AI models and then identify and sell the solutions to a large number of cloud customers.

Anthropic will employ Amazon's cloud behemoth AWS as a key cloud provider for mission-critical tasks such as safety research and future foundation model development as part of the funding arrangement, according to the e-commerce business. Anthropic will also develop, train, and deploy its future foundation models using AWS Trainium and Inferentia chips.

Amazon CEO Andy Jassy stated in a statement that the company believes it can "improve many customer experiences, both short and long-term, through our deeper collaboration" with Anthropic.

"Customers are quite excited about Amazon Bedrock, AWS's new managed service that enables companies to use various foundation models to build generative AI applications on top of, as well as AWS Trainium, AWS's AI training chip, and our collaboration with Anthropic should help customers get even more value from these two capabilities."

Anthropic has raised a total of US$2.7 billion to date, with investors including Spark Capital, Salesforce, Sound Ventures, Menlo Ventures, and Zoom. When it received US$450 million in capital in May of this year, the business was valued at over US$5 billion. It was not stated how Anthropic was valued in the latest investment by Amazon.

The agreement with Anthropic allows Amazon, which is quickly stretching its own AI skills, to amass a larger war chest in the franticly developing field.

Anthropic CEO and co-founder Dario Amodei told the TechCrunch Disrupt audience last week that he doesn't see any impediments to his company's fundamental technology on the horizon.

"The last 10 years, there's been this remarkable increase in the scale that we've used to train neural nets and we keep scaling them up, and they keep working better and better," he stated only last week. "That's the basis of my feeling that what we're going to see in the next 2, 3, 4 years… what we see today is going to pale in comparison to that."

Anthropic has announced a "long-term" commitment to give future generations of its foundation models to AWS clients throughout the world via Amazon Bedrock, AWS's fully managed solution that enables safe access to the industry's best foundation models. Furthermore, Anthropic will provide AWS users early access to new tools for model customization and fine-tuning.

"Training cutting-edge models necessitates substantial resources, including compute power and research programmes." Anthropic said in a statement, "Amazon's investment and supply of AWS Trainium and Inferentia technology will ensure we're equipped to continue advancing the frontier of AI safety and research." "We look forward to working closely with Amazon to responsibly scale adoption of Claude and deliver safe AI cloud technologies to organisations around the world."