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Amazon has invested one other $4 billion in artificial intelligence startup Anthropic, doubling its total investment in the corporate to $8 billion, as Big Tech's race for dominance within the generative AI space heats up.
The deal can be Amazon's largest enterprise investment ever, after the corporate initially invested $1.25 billion within the San Francisco-based group in September last 12 months and increased that to $4 billion at the tip of March.
The financing is one in all several investment partnerships concluded last 12 months between AI start-ups and so-called hyperscalers, i.e. large cloud service providers.
Microsoft has invested greater than $13 billion in OpenAI, while also backing French AI startup Mistral and Abu Dhabi-based G42. Google has a contract with Cohere, where the corporate provides cloud infrastructure to coach the Canadian startup's AI software.
Dario Amodei, co-founder and CEO of Anthropic, said its AI software Claude has had “a 12 months of groundbreaking growth.”
“Our collaboration with Amazon has been instrumental in bringing Claude’s capabilities to tens of millions of end users across tens of hundreds of consumers,” he added. “We sit up for working with Amazon to coach and operate our most advanced AI model.”
Most recently, Anthropic was valued at just over $18 billion earlier this 12 months after raising $750 million in a funding round led by enterprise capital firm Menlo Ventures. Since then, its biggest competitors OpenAI and Elon Musk's xAI have seen valuations rise to $150 billion and $45 billion, respectively, in recent funding rounds.
As the race to construct more powerful AI systems accelerates, the capital-intensive nature of the technology has led to consolidation on this area.
Founders and employees of AI startups like Adept, Inflection, and Character AI have been hired by Amazon, Microsoft, and Alphabet, respectively. The big tech firms paid billions of dollars in deals to amass the perfect employees of the young AI firms while stopping outright takeovers.
Large technology firms have turn into the highest funders on this space as they develop AI software while constructing cloud infrastructure to run AI services created by third-party customers.
Founded by former OpenAI researchers, Anthropic is understood for its chatbot Claude, which outperforms OpenAI's GPT-4 in quite a few industry benchmarks. Additionally, Google has previously received $2 billion in investments.
The recent cope with Amazon deepens Anthropic's technical partnership with the web retail giant's cloud and chip products, but doesn’t preclude collaboration with other firms resembling Google or Nvidia.
Amazon is already working on embedding Anthropic's Claude models into the subsequent generation of its Alexa speaker to support the “conversational” AI system.
According to recent financial filings, capital spending on the 4 largest hyperscalers – Amazon, Microsoft, Meta and Google – rose greater than 62 percent year-over-year to about $60 billion.
Meta and Amazon, amongst others, pointed to further spending increases next 12 months while reassuring the market of demand for generative AI infrastructure and services.
Amazon's bet on Anthropic comes as regulators within the US, UK and EU are ratcheting up concerns that deals between Big Tech and the best-known AI start-ups could pose anti-competitive risks.
The UK competition regulator recently reviewed Google's cope with Anthropic but didn’t flag it for further investigation.
