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Amazon Boosts Its AI Efforts with a Potential $4 Billion Investment in Anthropic

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San Francisco, Sept 25 (The Street Press) – Amazon.com announced on Monday that it plans to put up to $4 billion in cash into Anthropic, a well-known startup. Amazon is doing this to keep up with other companies in the cloud business and make advances in artificial intelligence.

As part of the agreement, Amazon’s employees and cloud customers will get early access to Anthropic’s technology. They can use this technology to improve their own businesses. The startup, which is based in San Francisco, has also agreed to mainly use Amazon’s cloud services. This includes using Amazon’s own chips for training its future AI models. These chips will be purchased from the online retail and computing giant.

In a shared interview, the CEOs of Amazon’s cloud division and Anthropic revealed that the initial investment is set at $1.25 billion. Furthermore, either party can decide to initiate an additional $2.75 billion in funding provided by Amazon.

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They didn’t disclose the exact percentage of Anthropic that Amazon would now own or the startup’s new valuation, which was last estimated to be over $4 billion. Amazon clarified that it wouldn’t secure a seat on Anthropic’s board, and its ownership stake would remain as a minority position.

This news signifies one of Amazon’s most significant responses to competition from Microsoft and Alphabet’s Google. These smaller cloud competitors have been promoting or creating impressive AI capabilities this year. Additionally, it highlights the continuous efforts of cloud companies to establish partnerships with AI startups that are shaping the landscape of their industry.

Starting in 2019, Microsoft has invested billions of dollars in its collaboration with the creator of ChatGPT, OpenAI. This partnership grants Microsoft’s customers exclusive access to OpenAI’s technology for generating written content and images.

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Google has been a pioneer in the field of AI and, in May, they participated in Anthropic’s $450 million fundraising round. This partnership is expected to continue, according to the startup.

As for Amazon, this deal announced on Monday could lead to increased demand, especially for chips used in AI. Anthropic has committed to collaborating on the development of technology for Amazon’s Trainium and Inferentia chips, among other things.

Adam Selipsky, the CEO of Amazon Web Services, mentioned that this partnership will contribute to enhancing Anthropic’s models and also improve their chip technology and AI infrastructure.

It’s worth noting that Anthropic, which was established by former OpenAI executives, including Amodei, maintains a connection with Google. The company is part of a group of firms working on generative AI, which are systems capable of generating content that resembles human creation. What sets Anthropic apart is its focus on training AI to adhere to ethical and moral values in its work.

Amodei did not provide details regarding the competitiveness of their latest financing.

Anthropic is maintaining its partnership with Google, which was announced in February. They are utilizing Google’s custom chips and intend to offer their technology through Google Cloud and other platforms.

However, with the agreement announced on Monday, Anthropic is also bolstering Amazon Bedrock, a service that has garnered thousands of users interested in creating AI applications.

Amazon’s customers will have early access to features from Anthropic, including the ability to customize their AI. Selipsky emphasized that both companies are committed to offering future versions of Claude on Amazon Bedrock for many years to come.

Claude 2, developed by Anthropic, is an AI model capable of handling large prompts, making it suitable for analyzing lengthy business or legal documents.

Amodei highlighted that this partnership allows them to collaborate closely to promote enterprise usage of Claude, which has already generated significant demand on Bedrock.

Notably, data analytics company LexisNexis is working with Anthropic and Amazon to enhance its legal search capabilities. Other notable customers include Bridgewater Associates and Lonely Planet.

While Anthropic may not have achieved the same level of name recognition or usage as OpenAI, the startup behind GPT-4 and ChatGPT, it remains actively engaged in driving AI advancements in various applications.

Amazon’s strategy is to provide customers with a comprehensive selection of AI models to minimize their need to seek external cloud services.

Regarding the possibility of Amazon investing in more AI startups beyond Anthropic, Selipsky stated, “I honestly don’t know what the future will hold.” This indicates that Amazon’s approach to future investments in AI startups remains uncertain.

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Sk Sahiluddin
Sk Sahiluddinhttps://www.thestreetpress.com
Sk Sahiluddin is a seasoned journalist and media professional with a passion for delivering accurate and impactful news coverage to a global audience. As the Editor of The Street Press, he plays a pivotal role in shaping the editorial direction and ensuring the highest journalistic standards are upheld.
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