Amazon Intensifies Its Competition In AI With $4 Billion Investment In ChatGPT Rival Anthropic

Amazon, on Monday, said that it will invest up to $4 billion in cash in the high-profile startup Anthropic, which is Microsoft’s ChatGPT rival company, in order to compete with growing cloud rivals on artificial intelligence.

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According to a report by Reuters, Amazon  employees and cloud customers will gain early access to technology from Anthropic as part of the deal, which they can infuse into their businesses.

Both the companies, in a joint statement, said that the immediate investment will be $1.25 billion, with either party having the authority to trigger another $2.75 billion in funding by Amazon.

The startup based in San Francisco has also made a commitment to predominantly utilize Amazon's cloud services. This includes the intention to train its forthcoming AI models using substantial quantities of proprietary chips that it will procure from the leading online retailing and computing giant.

However, both the companies refrained from disclosing the specific percentage of Anthropic that Amazon would now possess, as well as the startup's revised valuation, which was previously valued at over $4 billion. Amazon clarified that it would not be entitled to a board seat and emphasized that its ownership stake constituted a minority position.

This development marks Amazon's most significant response to the competitive challenges posed by Microsoft and Alphabet's Google, both of which are smaller cloud competitors that have been actively promoting or creating robust AI solutions this year. 

Furthermore, this deal underscores the continuous strategic efforts by cloud companies to establish partnerships with AI startups that are redefining the landscape of their industry.

Amazon’s rival companies Microsoft and Google have been putting billions of dollars of investments in AI based companies. Anthropic, established by former OpenAI executives, including Amodei, is among the several companies dedicated to developing generative AI systems capable of generating content as convincingly as a human. Anthropic's distinctive focus lies in training AI to uphold ethical values, setting it apart in this field of research.

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Meanwhile, Google played a pioneering role in advancing this field of AI and demonstrated its commitment by participating in Anthropic's $450-million fundraising round in May. The startup has indicated that this partnership is here to stay.