By Arsheeya Bajwa and Krystal Hu
(Reuters) -Amazon.com has injected another $4 billion into OpenAI rival Anthropic as the e-commerce giant takes on Big Tech rivals in a race to capitalize on generative artificial intelligence technology.
This doubles Amazon’s investment in the firm known for its GenAI Claude chatbot, but it remains a minority investor, the startup said Friday. Similar to Amazon’s previous $4 billion investment, it comes in the form of convertible notes and takes place in phases, initially at $1.3 billion.
Anthropic is also in talks with other investors to raise more capital through Amazon’s backing, added the sources, who requested anonymity to discuss private matters. Anthropic declined to comment.
Amazon, which has gradually established itself as Anthropic’s main cloud partner, is in fierce competition with Microsoft and Alphabet’s Google to offer AI-based tools to its cloud customers. AWS brings significant revenue to Anthropic as a major distributor of its latest models.
“The investment in Anthropic is essential for Amazon to remain in a leadership position in the AI space,” said Gil Luria, analyst at DA Davidson.
The e-commerce company’s increased investment in Anthropic highlights the billions of dollars invested in AI startups over the past year, as investors seek to profit from the technology’s rise to popularity with the launch of OpenAI’s ChatGPT in late 2022.
Microsoft-backed OpenAI raised $6.6 billion from investors last month, which could value the company at $157 billion and cement its position as one of the world’s most valuable private companies .
Anthropic plans to train and deploy its foundational models on Amazon’s Trainium and Inferentia chips. The intensive process of training AI models requires powerful processors, making securing expensive AI chips a top priority for startups.
“This (partnership) also allows Amazon to promote its AI services, such as leveraging its AI chips for training and inference, which Anthropic uses,” Luria said.
Nvidia currently dominates the AI processor market and counts Amazon among its long list of so-called hyperscaler customers.
Nonetheless, Amazon is working on developing its own chips through its Annapurna Labs division, which Anthropic said it “works closely with” to help develop processors. Amazon has also attempted to create its own AI model, named “Olympus”, which it has not yet released.
Anthropic, co-founded by former OpenAI executives and siblings Dario and Daniela Amodei, said last year it had secured a $500 million investment from Alphabet, which promised to invest $1.5 billion additional dollars over time.