The Generative AI Race: Amazon pours $2.75 billion into Anthropic

The companies announced an initial investment of $1.25 billion in September, and then said Amazon would invest up to $4 billion

by Sededin Dedovic
The Generative AI Race: Amazon pours $2.75 billion into Anthropic
© Noah Berger / Getty Imges

Amazon recently announced its intention to invest an additional $2.75 billion in support of Anthropic, a young San Francisco company that excels in the field of generative artificial intelligence. This news is just a continuation of their previous investment of 1.25 billion dollars, which they announced last September.

As part of that initial investment, Amazon expressed its intention to invest up to $4 billion in Anthropic. Now, the latest announcement marks the second tranche of that funding. This move by Amazon clearly shows their seriousness in investing in the field of generative artificial intelligence and driving progress in that direction.

Anthropic, valued at $18.4 billion according to sources, is becoming an increasingly significant player in the field. Amazon will retain a minority stake in the company and will not have a seat on Anthropica's board of directors, the company said.

The deal was made at the latest valuation of the AI startup. Their core model and chatbot Claude competes with already well-known names like OpenAI and ChatGPT. This sector is experiencing rapid growth, and companies like Anthropic are becoming key players shaping the future of generative artificial intelligence.

Anthropic isn't just another AI startup; they've already closed five different financing deals over the past year, worth a total of about $7.3 billion. Their product directly competes with ChatGPT, which is a product of OpenAI.

The founders of Anthropic are former researchers and employees of OpenAI, which further highlights the competitive dynamic between the two companies. One of the key aspects that makes Anthropic stand out is their Gemini Ultra product.

This product excels on industry benchmark tests, such as undergraduate-level knowledge tests, graduate-level reasoning, and basic math. Its ability to cope with these tests indicates a high level of development of generative artificial intelligence within the company.

Swami Sivasubramanian, vice president of data and AI at AWS cloud provider, expressed optimism about this partnership, noting how generative AI technology is becoming key in transforming various industries. His words reflect the importance of this strategic partnership for Amazon, with the hope that it will improve user experiences on their platform.

The move by Amazon is just one in a series of similar initiatives among cloud service providers. Competition in the field of artificial intelligence is intensifying, and companies like Amazon must stay one step ahead to maintain their competitive edge.

Investing in promising startups like Anthropic becomes key to securing their position as leaders in the field of technological innovation.

TechCrunch Senior Writer Devin Coldewey and Anthropic Co-Founder & CEO Dario Amodei speak onstage during TechCrunch Disrupt 2023© Kimberly White / Getty Images

In addition to Amazon, other market participants are also showing interest in generative artificial intelligence.

Recent events related to Anthropic shares, such as the sale of shares to the crypto exchange FTX, illustrate how this area is attracting the attention of investors from various sectors. This market is expected to continue to grow as technology develops and integrates into various aspects of society and industry.

Generative artificial intelligence has seen a remarkable increase in interest and investment over the past few years. The field has exploded over the past year, with a record $29.1 billion invested in nearly 700 deals in 2023, according to a PitchBook report.

This sharp increase indicates a widespread recognition of the potential of this technology to transform various industries and sectors. Who will win this race is still unclear. However, one thing is certain: generative artificial intelligence has the potential to change the way we live, work and communicate.

Although generative artificial intelligence has great potential, there are also certain challenges and ethical considerations. One concern is the possibility of misinformation. Generative AI can be used to create fake news and propaganda material.

Another concern is the possibility of employment. As generative AI becomes more sophisticated, it could replace humans in certain jobs. There are also ethical considerations around bias and fairness. Generative AI models can reflect biases from the data they are trained on.
It will be important to develop this technology in a responsible manner in order to maximize its benefits and minimize its potential harms.

The first major breakthrough in the field of generative artificial intelligence occurred at the end of 2022, when OpenAI introduced ChatGPT. This platform has shown impressive capabilities in generating human-like language as well as creating creative content.

Since then, ChatGPT has become a key tool in many industries, including financial services, legal applications and education. The fact that more than 92% of Fortune 500 companies use the OpenAI platform speaks to the wide acceptance of this technology in the business world.

In light of these developments, cloud service providers such as Amazon Web Services recognize the importance of staying at the forefront of technological innovation. Investing in promising startups like Anthropic is becoming key to securing their position as a leader in the field of artificial intelligence