(Bloomberg) — Amazon.com Inc. is investing another $4 billion in artificial intelligence startup Anthropic, boosting its stake in one of OpenAI’s main competitors.
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The new injection, announced by the companies on Friday, follows a $4 billion investment in Anthropic made earlier this year. That deal included provisions for Anthropic to use Amazon Web Services data centers for some of its computing needs, as well as AI chips designed by AWS. Anthropic also has close ties to Alphabet Inc’s Google.
The latest investment “makes AWS our primary cloud and training partner,” Anthropic said in a blog post, adding that the startup plans to use Amazon’s AI chips to develop its most advanced models. The deal maintains Amazon’s minority stake in the company, Anthropic said. As with Amazon’s initial $4 billion injection, this deal takes the form of convertible notes. Amazon’s initial additional investment will be $1.3 billion, with the remainder to follow.
Founded in 2021 by former OpenAI employees, Anthropic has become one of the ChatGPT maker’s closest rivals. Its Claude family of chatbots is widely considered one of the most capable of generating text from scratch. Anthropic has gained traction selling AI software to businesses, including financial and healthcare companies. And Amazon has used its close relationship with Anthropic to strengthen its credentials in AI services, offering Claude models to customers on the AWS AI Model Provider Marketplace.
Amazon’s additional investment highlights the enthusiasm for AI products and the immense capital requirements to build the large language models that underpin them. OpenAI raised $6.6 billion in funding in October at a valuation of $157 billion. Meanwhile, Elon Musk’s xAI was looking to raise funding at a valuation of $40 billion, Bloomberg previously reported.
Anthropic CEO Dario Amodei said he expects the costs of developing larger AI models could eventually reach $100 billion, up from $100 million this year. However, like other major AI developers, Anthropic has also seen the results of its costly efforts to create more advanced artificial intelligence models decline, Bloomberg previously reported. Anthropic saw the schedule slip for the release of its highly anticipated Claude model called 3.5 Opus.