Amazon Completes its $4B Investment Plan in Anthropic, Doubling Down on Its Commitment
Amazon invested a further $2.75 billion in growing AI power Anthropic on Wednesday, following through on the option it left open last September. The $1.25 billion it invested at the time must be producing results, or perhaps they’ve realized that there are no other horses available to back.
The September deal put $1.25 billion into the company in exchange for a minority stake, and certain tit-for-tat agreements like Anthropic continuing to use AWS for its extensive computation needs.
Amazon reportedly had until the end of the first quarter to decide whether to increase its investment to a maximum of $4 billion, and here we are just before the deadline, and the company has decided to throw in the maximum amount.
Anthropic’s AI models are one of very few that compete at the highest levels of capability (however you define it) yet are available at scale for enterprises to deploy internally or in user-facing applications. OpenAI’s GPT series and Google’s Gemini are the others up there, but upstarts like Mistral may soon threaten that fragile triumvirate.
Companies such as Amazon and Microsoft, unable to create sufficient models on their own, have been indirectly operating via OpenAI and Anthropic. The alliance with either of these affluent competitors has brought significant advantages to these companies, without noticeable drawbacks so far. Here is more on their immense gains.
The limited insight we can gather from Amazon’s decision to invest maximum further in AI after closely inspecting the workings, is indeed, scarce.
Check out Anthropic’s $5B, 4-year plan to counter OpenAI
It’s highly strategic for these enterprises, who have amassed significant reserves for this very purpose (outspending competitors when innovation is not an option), to invest heavily in the AI sector. The AI industry is currently akin to a roulette table, with OpenAI and Anthropic as the main options. Companies that couldn’t predict or develop this technology themselves are the least certain about future developments. Yet, if your arch-rival is backing one option, it seems logical for you to support the other.
Especially if you can bet on black at a discount — which is what Amazon got here, since it could invest at Anthropic’s September valuation, which is most certainly lower than it is today.
That said, if things were looking sketchy over there — the way they must have looked at Inflection before Microsoft pounced on it — Amazon could have backed out or just invested less than the full supplemental $2.75 billion. But that might have sent a confusing signal no one wants getting out there, least of all existing multibillion-dollar investors.
We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft and other multinational interests think they can do to monetize this supposedly revolutionary technology.
Why it’s impossible to review AIs, and why TechCrunch is doing it anyway
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