#042a - Amazon Invests $4 Billion in Anthropic
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AI BYTE # 1 📢 - Amazon Invests $4 Billion in Anthropic, an AI Startup with a Vision
⭐ Tech giants and venture capitalists are investing heavily in .AI startups, hoping to gain an edge in the AI arms race.
One of the latest and biggest deals is Amazon’s agreement to invest up to $4 billion in Anthropic, an AI company that offers an AI assistant called Claude. Claude competes with ChatGPT, a chatbot that can produce humanlike writing and computer code.
ChatGPT is made by OpenAI, another AI startup that has received a $10 billion investment from Microsoft. Microsoft and OpenAI have an exclusive partnership, which gives Microsoft access to OpenAI’s technology and cloud infrastructure.
Anthropic, on the other hand, has taken money from both Amazon and Google, two of the largest cloud-computing providers.
Anthropic’s early backers included crypto entrepreneur Sam Bankman-Fried. In May, it announced it had raised $450 million from investors including Google, Spark Capital and Salesforce. Its valuation at the time was $4 billion, according to people familiar with the matter.
Anthropic claims its technology is safer and more reliable than that of competitors and plans to use Amazon’s custom chips to build and deploy its AI software.
Amazon’s minority stake in Anthropic is part of a new fundraising round, at a valuation yet to be determined. As part of the deal, Anthropic has agreed to spend a certain amount of the capital on Amazon Web Services (AWS), Amazon’s cloud infrastructure business.
AWS is the leader in the cloud-computing market but faces fierce competition from Microsoft Azure and Google Cloud. By investing in AI startups, Amazon hopes to attract more customers who want to build AI features on its cloud platform.
AI is still a nascent and rapidly evolving field, with many challenges and opportunities ahead. Large language models, the algorithms that power chatbots like ChatGPT and Claude, require huge amounts of capital and computing power to create and train.
Despite the excitement and investment in AI, it still makes up only a fraction of the revenue flowing into cloud-computing businesses. In its latest earnings call, Microsoft projected that, of the 26% quarterly revenue growth it expected in its Azure business, two percentage points would come from its AI services.
The tech giants are betting that these models will have a wide range of applications and benefits for their businesses and customers.
