Amazon is making its largest outside investment in three decades as it looks to gain an edge in the artificial intelligence race.
The tech giant said it would spend an additional $2.75 billion to support Anthropic, a San Francisco-based startup widely seen as a leader in generative artificial intelligence. Its base model and chatbot Claude competes with OpenAI and ChatGPT.
The companies announced an initial investment of $1.25 billion in September and said Amazon would invest up to $4 billion. Wednesday’s news marks Amazon’s second round of funding.
Amazon will retain a minority stake in the company and will not have a seat on Anthropic’s board of directors, the company said. Sources revealed that the deal was reached at a time when the artificial intelligence startup was last valued at $18.4 billion.
Over the past year, Anthropic has closed five different financing deals worth approximately $7.3 billion, and with Amazon’s new investment, the total total exceeds $10 billion. The company’s products compete directly with OpenAI’s ChatGPT in the enterprise and consumer space and was founded by former OpenAI research executives and employees.
Just weeks after news of Amazon’s investment broke, Anthropic unveiled Claude 3, its latest suite of artificial intelligence models that it says is the fastest and most powerful yet. The company says its new model outperforms OpenAI’s GPT-4, GoogleGemini Ultra conducts industry benchmarks such as undergraduate-level knowledge, graduate-level reasoning, and basic mathematics.
“Generative artificial intelligence is poised to become the most transformative technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experience and look forward to future developments.” Ci.
Amazon’s move is the latest in a spending blitz by cloud providers to stay ahead in the race for artificial intelligence. This is the second update on Anthropic’s capital structure in a week. Cryptocurrency exchange FTX reached an agreement with a group of buyers to sell a majority stake in Anthropic, a bankruptcy filing revealed late Friday, confirming a CNBC report last week.
The term generative AI entered mainstream and business parlance seemingly overnight, and the field has exploded over the past year, with a record $291 investment in nearly 700 deals in 2023, according to PitchBook. One hundred million U.S. dollars. OpenAI’s ChatGPT first demonstrated the technology’s ability to generate human-like language and creative content in late 2022. OpenAI has since said that more than 92% of Fortune 500 companies have adopted the platform, covering industries such as financial services, legal applications and education.
Cloud providers like Amazon Web Services don’t want to be caught off guard.
It’s a symbiotic relationship. As part of the agreement, Anthropic said it will use AWS as its primary cloud provider. It will also use Amazon chips to train, build and deploy its underlying models.Amazon has been designing its own chips, which may eventually be used with Nvidia.
Microsoft It has been investing heavily, with a high-profile investment in OpenAI.According to reports, Microsoft’s bet on OpenAI has jumped to $13 billion The startup’s valuation has exceeded $29 billion. Microsoft’s Azure is also the exclusive provider of computing power for OpenAI, which means that the startup’s success and new business will flow back to Microsoft’s cloud servers.
At the same time, Google also supports Anthropic and has reached its own agreement with Google Cloud. It agreed to invest up to $2 billion in Anthropic, including a $500 million cash infusion and an additional $1.5 billion over time. Salesforce is also a supporter.
Anthropic’s new model suite, announced earlier this month, marks the first time the company has offered “multimodality,” the option to add photo and video capabilities to generated artificial intelligence.
But multimodal and increasingly complex AI models also lead to more potential risks. Google recently took its artificial intelligence image generator, part of the Gemini chatbot, offline after users discovered historical inaccuracies and questionable responses that were widely circulated on social media.
Anthropic’s Claude 3 does not produce images; instead, it only allows users to upload images and other files for analysis.
“Of course, no model is perfect, and I think it’s really important to make that clear up front,” Anthropic co-founder Daniela Amodei told CNBC earlier this month. “We work very hard to try to make these models as capable and as capable as possible. Security. Of course, there are places where models still make stuff up from time to time.”
Anthropic’s previous largest venture investment was in an electric vehicle manufacturer Rivian, with investments exceeding US$1.3 billion. This is also a strategic partnership.
These partnerships have been strengthening in the face of increased antitrust scrutiny. Seven giants-Amazon, Microsoft, appleNvidia, Alphabet, Yuan and Tesla According to Pitchbook data, an increase in venture capital has offset this effect.
According to Pitchbook data, investment in artificial intelligence and machine learning among these seven technology companies jumped to $24.6 billion last year from $4.4 billion in 2022. Meanwhile, M&A deals among large technology companies fell from 40 in 2022 to 13 last year.
“There’s a paranoid incentive to invest in potential disruptors,” Pitchbook AI analyst Brendan Burke said in an interview. “Another incentive is to increase sales and invest in companies that might use each other’s products — they are often partners. , not competitors.”
Big tech’s investment spree in artificial intelligence has been criticized for the seemingly circular nature of these protocols. By investing in artificial intelligence startups, some, including Benchmark’s Bill Gurley, have accused tech giants of funneling cash back into their cloud businesses, which in turn could show up as revenue.Gurley describe It is a way to “increase your income”.
The FTC is taking a closer look at these partnerships, including Microsoft’s OpenAI deal and Google and Amazon’s Anthropic investment. Sometimes so-called “round trips” can be illegal – especially if the purpose is to mislead investors. But Amazon said this type of venture capital investment does not constitute a round trip.
FTC Chairman Lina Khan announced the investigation at the agency’s Artificial Intelligence Technology Summit, describing it as “a market review of emerging investments and partnerships between artificial intelligence developers and major cloud service providers.” investigation”.
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