Amazon’s $4 Billion Leap Into the Future: Betting Big on AI With Anthropic

On March 27, Amazon announced that it completed a $4 billion investment in the AI startup Anthropic, confirming its massive bet on AI. Amazon began with a $1.25 billion investment in September 2023 and recently added another $2.75 billion. This big investment shows Amazon’s effort to keep up in the AI race with some big players like Open AI and Google.

Under this deal, Amazon Web Services (AWS) also becomes Anthropic’s primary cloud provider. This means Anthropic’s advanced AI models will run on AWS’s powerful Trainium and Inferentia chips.

Last month, Amazon announced that Amazon Bedrock now offers access to Anthropic’s top-tier AI models, including the Claude 3 series. Amazon says that these models excel in intelligence, offering near-human interaction, enhanced precision, and new vision features. According to Amazon, Industry benchmarks show that Claude 3 Opus outshines rivals like OpenAI’s GPT-4 in reasoning, math, and coding, setting new industry standards.

AWS, Anthropic, and Accenture are teaming up to speed up the use of advanced AI, especially in sectors like healthcare and banking. This partnership will offer organizations top AI models from Anthropic and unique tools from Amazon Bedrock, along with expert advice from all three companies. This partnership intends to help businesses create and expand AI applications tailored to their needs.

An Amazon representative explained that their financial support for Anthropic is all in cash, unlike Microsoft’s deal with OpenAI, which included Azure cloud credits. This marks a different approach to how tech giants invest in AI startups.

For big companies with lots of money saved for competition, investing heavily in AI makes perfect sense, especially if they can’t outdo their rivals in innovation. If a company can’t lead in AI technology themselves and sees a competitor invest in one company, it strategically invests in the other to stay competitive. These partnerships have brought significant advantages to both sides with few, if any, drawbacks so far.