Amazon Boost Anthropic AI Firm with $2.5B Investment

Amazon has committed an additional $2.75 billion to Anthropic, an AI company it invested $1.25 billion in back in September 2018.

Following through on a September 2018 option, Amazon committed an additional $2.75 billion to the rapidly expanding artificial intelligence company Anthropic on Wednesday. Its $1.25 billion investment at the time must be paying off, or maybe they’ve come to the conclusion that there aren’t any more horses to support.

In September’s acquisition, Anthropic exchanged a minority ownership in the business and certain tit-for-tat agreements, such as its continued usage of AWS for its substantial calculation needs, for $1.25 billion.

Just before the deadline, Amazon has decided to contribute the maximum amount of $4 billion, despite having until the end of the first quarter to make this decision.

The AI models from Anthropic are among the very few that can compete at the highest levels of capacity (regardless of how that is defined) and are widely accessible for usage by businesses in user-facing applications or internally. The other two are OpenAI’s GPT series and Google’s Gemini, but newcomers like Mistral could soon pose a danger to this precarious trio.

Because they are unable, for whatever reason, to create sufficient models internally, corporations such as Microsoft and Amazon have been forced to take action through intermediaries, mainly Anthropic and OpenAI. By siding with one of these wealthy adversaries, the two have benefited greatly and have not yet experienced many drawbacks.

Amazon’s decision to invest the maximum amount after (presumably) gaining a close-up view of their AI manufacturing process doesn’t yield significant benefits.

These businesses, which have vast war chests set up for just this purpose (outspending competitors when they can’t out-innovate them), have too much strategic acumen to invest heavily in the AI industry. The AI landscape at the moment resembles a roulette table, with Anthropic and OpenAI standing in for black and red, respectively. Nobody can truly predict where the ball will land, least of all the businesses that were unable to foresee or develop this technology. But it only makes sense for you to wager on black if your fiercest rival places their chips on red.

This is especially true if you can invest at Anthropic’s September valuation, which is undoubtedly lower than it is now. This is what Amazon did here, betting on black at a discount.

However, if things were dubious, as they likely appeared at Inflection prior to Microsoft’s takeover, Amazon might have withdrawn or just contributed a smaller amount than the entire additional $2.75 billion. However, this could have conveyed a contradictory message, suggesting that no one, including the multibillionaire investors already in place, desired attention.

We’ll discover this year what Amazon, Apple, Microsoft, and other multinational companies think they can do to profit from this ostensibly revolutionary technology. We know Anthropic has a strategy.