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Amazon plans to invest up to $4 billion in artificial intelligence startup Anthropic, as the major tech group steps up its rivalry with Microsoft, Google and Nvidia to let AI companies use its technology.
With the deal, which was announced on Monday, Amazon will initially invest $1.25 billion for a minority stake in Anthropic. Both companies will later have the option to increase the total to $4 billion, they said.
It’s an effort to build a close relationship with a prominent AI startup, similar to Microsoft’s alliance with OpenAI, the group behind ChatGPT. As part of the deal, Anthropic will use Amazon’s cloud computing platform and its special AI chips to create its models.
AI startups are engaged in an arms race to secure the precious chips and data center resources needed to build the latest AI systems, the so-called large language models.
Anthropic was last valued at nearly $5 billion in a funding round earlier this year, according to a person familiar with the terms. It’s one of OpenAI’s top competitors that has raised huge sums this year, including Inflection AI, which raised $1.3 billion from Microsoft and Nvidia, and Toronto-based Cohere, which raised $270 million from Nvidia and others.
The startup’s new alliance with Amazon Web Services appeared to be a shift from Google, which invested $300 million in Anthropic last year. It comes just seven months after Anthropic said it would train its models on Google’s chips and use the cloud.
For Amazon, the deal marks the latest effort to capitalize on the excitement around generative AI, a technology that can create human-like text and realistic images. Amazon wants to position its Trainium and Inferentia chips as credible alternatives to Nvidia’s processors for training and running generative AI models.
Anthropic’s Claude chatbot, which competes with ChatGPT, is already among a suite of AI products available on AWS’s Bedrock service, which allows customers to build generative AI applications in the cloud.
The new deal represents a “significant expansion of the partnership” with Anthropic, said Adam Selipsky, head of AWS. Anthropic would have access to “significant quantities” of Trainium chips to train future versions of its base models, he added.
As part of a historic partnership with OpenAI earlier this year, Microsoft invested billions in the Silicon Valley-based startup, becoming its exclusive cloud provider. While Anthropic’s deal with Amazon has echoes of that agreement, it is not an exclusive arrangement.
Selipsky said Amazon’s strategy was “very different” from Microsoft’s because it focused on “giving customers the most choice and the most security. . . Exclusivity is not the goal.”
Amazon will become Anthropic’s “primary” cloud provider for “mission-critical workloads,” the companies said.
Anthropic co-founder Dario Amodei stressed that “nothing has changed” in the deal with Google, which was announced in February. Google said at the time that it was Anthropic’s “cloud provider of choice.”
Chipmaker Nvidia has been the biggest winner so far from the frenzy of excitement over generative AI.
Jim Hare, a technology analyst at Gartner, said Amazon’s deal with Anthropic would allow AWS to demonstrate that Nvidia’s chips were not the only option for AI developers.
With Monday’s deal, Amazon could point to “a model provider that has cachet” using its chips, Hare said. It could help dispel the “perception” that Amazon has fallen behind in AI, he added.
Anthropic was founded when a group of OpenAI employees, led by Amodei, split from the company following disagreements over the group’s direction following Microsoft’s $1 billion investment in 2019.
Amodei said: “I feel very good about this [Amazon] deal and the provisions therein to ensure that everything remains safe.”
The valuation at which the investment is made, and the size of Amazon’s ownership stake, will be determined at a later financing round. Two people familiar with the terms said Amazon would have a much smaller stake than the 49 percent ownership Microsoft would have sought with its investment in OpenAI.