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Amazon’s $4 Billion Anthropic Investment Signals A New Era Of AI Competition

The ecommerce behemoth’s financial backing for the Claude chatbot is a clear sign it’s serious about competing in the artificial intelligence arms race

E-commerce behemoth Amazon has invested a hefty $4 billion into AI startup Anthropic, the company behind the Claude chatbot, which was founded by siblings Dario and Daniela Amodei who left OpenAI to start Anthropic. 

Microsoft’s $13 billion investment in OpenAI, which is currently the top generative AI company, dwarfs this deal. However, the Microsoft-OpenAI partnership has been growing since 2019.

Despite the smaller deal size, Amazon’s investment in Anthropic is a clear sign that the company is serious about competing in the AI arms race. Anthropic has claimed that its AI model is safer than rivals because it can self-correct without the need for human moderation.

A true competitor 

Anthropic’s Claude and Claude 2 chatbots are similar to ChatGPT and Bard in their ability to translate text, write code and answer questions. However, Anthropic claims that its models are guided by a set of principles and can self-correct without human input. Also, Claude can respond to larger prompts, making it well-suited for tasks such as combing through long business or legal documents.

As part of the deal, Amazon will gain a minority stake in Anthropic as well as incorporate its technology into various products, including the Amazon Bedrock AI development service. Anthropic will use Amazon’s custom chips to build, train, and deploy future AI foundation models, and will use Amazon Web Services (AWS) as its primary cloud provider.

The generative Al era 

Jim Hare of research firm Gartner told BBC News, “If you look at the world of generative AI, this is the beginning of the race.

“Now we’re starting to see the other cloud providers investing more in generative AI coming up with their own announcements, their own products, and I think the playing field is starting to level off. In other words, it’s no longer a Microsoft-OpenAI show only,” said Hare. 

According to Reuters, the e-commerce giant is investing $1.25 billion in Anthropic, with the option to invest a further $2.75 billion. If Amazon invests the full $4 billion, Bloomberg reports that it would be the largest known investment ever related to AWS, the world’s largest seller of on-demand computing power and data storage.

Google isn’t sitting on the sidelines either. The YouTube parent company also invested $300 million in Anthropic earlier this year, giving it a roughly 10% stake in the company. Reuters also reports that despite its new deal with Amazon, Anthropic is continuing its partnership with Google and plans to make its technology available via Google Cloud.

Written By

Isa Muhammad is a writer and video game journalist covering many aspects of entertainment media including the film industry. He's steadily writing his way to the sharp end of journalism and enjoys staying informed. If he's not reading, playing video games or catching up on his favourite TV series, then he's probably writing about them.

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