Amazon Invests Up To $4 Billion In ChatGPT Competitor, AI Startup Anthropic

Amazon Inc. AMZN has announced a strategic investment of up to $4 billion in Anthropic, an emerging AI company, as the e-commerce giant seeks to harness the potential of artificial intelligence in diverse applications across its business.

As part of this groundbreaking deal, Anthropic will leverage Amazon’s custom-designed chips to develop and rollout its AI software. Amazon also intends to integrate Anthropic’s cutting-edge technology into various products within its expansive portfolio.

According to insider sources cited by The Wall Street Journal, Amazon is initially investing $1.25 billion in Anthropic, with the possibility of increasing this figure to $4 billion, contingent on certain conditions. Furthermore, Anthropic has committed to directing a portion of this capital toward Amazon’s cloud infrastructure arm, Amazon Web Services.

Shares of Amazon Inc. were up 0.6% in premarket trading on Monday.

The AI Gold Rush Continues

Alphabet Inc. GOOG GOOGL’s Google injected over $300 million into Anthropic earlier this year.

Salesforce Inc. CRM has also been actively involved in funding AI startups, including both Anthropic and OpenAI’s competitor, Cohere.

Founded in 2021, Anthropic distinguishes itself by offering an AI assistant called Claude, which competes directly with ChatGPT.

Led by siblings Dario and Daniela Amodei, both former OpenAI employees, Anthropic touts the safety and reliability of its technology.

Amazon’s choice to become Anthropic’s primary cloud provider underscores the growing importance of cloud infrastructure in the AI ecosystem.

Despite the enthusiasm and investments in AI, it still represents a fraction of the revenue generated by cloud-computing businesses.

Microsoft Corp. MSFT, for instance, projected that two percentage points of its anticipated 26% quarterly revenue growth in its Azure business would come from AI services.

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