Amazon finishes pumping $4B into AI darling Anthropic

Adds $2.75B to the ML sweepstakes ante and is counting on Claude

Amazon says it has concluded its investment in AI super-startup Anthropic, which now stands at $4 billion, a figure the e-commerce colossus committed to last year.

In September, the Big A plowed $1.25 billion into the upstart, and it's now added the final $2.75 billion as promised.

The deal makes Amazon Web Services the primary cloud provider for Anthropic, with the understanding that the machine-learning upstart will deploy its future foundation models on AWS Trainium and Inferentia chips.

An Amazon spokesperson said the arrangement is a cash investment and no portion of it consists of AWS cloud credits, a form of funding Microsoft bestowed through its Azure service upon OpenAI, a rival of Anthropic.

The ongoing AI cash giveaway by Amazon, Google, and Microsoft – the major US cloud providers – looks a lot like cloud seeding, which is to say incentivizing the future use of their services to train and run AI models.

By cramming the likes of OpenAI and Anthropic with funding and resources to provide all kinds of generative models and machine-learning technology, the overall goal seems to be to get paying customers into the public cloud to use those services, and keep those subscribers there.

It's more or less why Microsoft et al are so bent on pushing artificial intelligence: It's more stuff for people to subscribe to, with the technology coming from the startups the hyperscalers are directly sponsoring.

"Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI," said Swami Sivasubramanian, vice president of Data and AI at AWS, in a statement.

"Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers' experiences, and look forward to what’s next."

Last week, Anthropic – built by former OpenAI staff among others – announced a deal with AWS and Accenture to have the latter's engineers trained on Anthropic models running on Amazon's systems.

Like OpenAI, the beneficiary of some $13 billion in funding from Microsoft, Anthropic has been feted with cash. Last October, the three-year-old startup received a commitment of $2 billion from Google, Amazon's rival in the cloud infrastructure business. Its valuation has been estimated somewhere between $15 billion and $18.4 billion, based on $7.3 billion of investment last year.

The AI funding frenzy has not gone unnoticed in Washington, DC. The US Federal Trade Commission in January announced an inquiry into five companies: Alphabet, Amazon, Anthropic, Microsoft, and OpenAI. The watchdog is concerned that tech giants may be distorting the AI market and limiting competition.

Anthropic offers a generative AI model called Claude and has tried to position itself as a responsible provider of services. It claims, "We Build Safer Systems" without supplying the implied comparison, a subordinating conjunction that could be either "than OpenAI" or "than Google," which had a recent unfortunate incident with its Bard-turned-Gemini model. ®

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