Amazon announced on Friday its decision to inject an additional $4 billion into Anthropic, an artificial intelligence startup that’s emerging as a significant competitor to OpenAI and Google. This latest investment brings Amazon’s total commitment to Anthropic over the past 14 months to a substantial $8 billion. This significant financial backing highlights Amazon’s strategic drive to stay at the forefront of AI advancements and maintain its competitive edge in the technology sector.
The flow of capital into leading AI startups remains robust. xAI, a company founded by Elon Musk, is reportedly in discussions to secure new funding, which could potentially value the company at around $40 billion. In October, OpenAI successfully raised $6.6 billion, which boosted the company’s valuation to $157 billion.
“We’ve been impressed by Anthropic’s pace of innovation and commitment to responsible development of generative A.I., and look forward to deepening our collaboration,” stated Matt Garman, the chief executive of Amazon’s cloud computing division, AWS, in a blog post that detailed the agreement.
This surge in fundraising comes amid certain investor apprehension regarding the sustainability of these young, unprofitable companies and their ability to justify their high valuations. The landscape has created a divergence, as Anthropic and OpenAI secure continued financial backing while some smaller entities have been absorbed into larger corporations like Google and Microsoft. (Notably, The New York Times filed a lawsuit against OpenAI and its primary partner, Microsoft, in December, alleging the misuse of millions of articles published by The Times to develop chatbots that now compete with the news outlet. Both companies have responded by denying the claims.)
US regulators have also begun to scrutinize the substantial investments made by Microsoft, Amazon, and Google in AI startups. These companies require large sums to create cutting-edge AI models. But these agreements are seen as a way for the larger companies to foster strong relationships with smaller rivals while avoiding intense government oversight.
Like OpenAI, Anthropic develops generative AI capable of learning from massive datasets to produce humanlike text and images. Generative AI is used in the development of chatbots, including Anthropic’s Claude, and is also being developed to automate tasks and reshape sectors of the global economy.
Anthropic has actively cultivated a reputation for responsible AI development. The company’s leadership has voiced concerns about the potential existential risks associated with the technology if it is not developed and managed responsibly.
As part of the arrangement with Amazon, Anthropic relies on Amazon’s data centers, cloud computing platform, and semiconductors. Consequently, the San Francisco-based startup will be channeling a portion of its resources back to Amazon through payments for servers and other services from the Seattle-based tech giant. This dynamic benefits Amazon as it seeks to challenge Nvidia in the AI chip market. Adam Satariano is a technology correspondent for The Times, based in London.
