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Amazon Eyes Massive Stake in AI Powerhouse Anthropic with Strategic Investment Talks

AInvestFriday, Nov 8, 2024 6:00 am ET
1min read

Amazon is reportedly considering a significant new investment in Anthropic, a leading AI startup and formidable rival to OpenAI. After investing $40 billion in September 2023, Amazon is now discussing an additional multibillion-dollar commitment. These negotiations, still underway, would mark Amazon's most significant investment in a single company in nearly 30 years.

Established by former OpenAI executives Dario and Daniela Amodei, Anthropic has distinguished itself in the competitive AI field with its Claude series, challenging platforms like OpenAI's ChatGPT and Google's GeminiUltra. The startup recently introduced advanced AI models such as Claude 3.5 Sonnet, highlighting its capabilities in coding and human-computer interaction.

Reports suggest that Amazon aims to include terms ensuring Anthropic uses its proprietary chips in AI model training. This requirement underscores the tech giant's strategy to promote its Trainium chips over alternatives like Nvidia. The collaboration would see Anthropic gradually increase its reliance on Amazon's hardware, despite potential technical challenges and limitations on flexibility in choosing other cloud service providers.

The potential cash injection would come in the form of convertible notes, transforming into equity following successful fundraising from other investors. Meanwhile, joint discussions are focused on a cloud agreement wherein both companies would share revenue generated from sales of Anthropic's models to Amazon's cloud clients.

While Anthropic strengthens ties with Amazon, it maintains smaller cloud partnerships with Google, who committed $20 billion last year. This relationship, however, faces scrutiny as UK antitrust authorities evaluate large-scale tech investments within the AI sector to prevent market dominance by a few major corporations.

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