Amazon and Anthropic enter a mutually beneficial arrangement.

Amazon.com (NASDAQ: AMZN) announced a significant investment of up to $4 billion in the AI startup Anthropic to bolster its competitiveness in the field of artificial intelligence within the cloud market. This strategic move will grant Amazon’s employees and cloud clients early access to Anthropic’s technology, which they can integrate into their operations. Additionally, Anthropic will heavily rely on Amazon’s cloud services, including the utilization of proprietary chips from Amazon for training its future AI models.

Initially, Amazon is committing $1.25 billion to this partnership, with the potential for an additional $2.75 billion in funding. Specific ownership percentages and the updated valuation of Anthropic have not been disclosed, but Amazon emphasizes that it will maintain a minority position without obtaining a board seat. (Reuters)

This investment by Amazon is seen as a significant response to the growing AI capabilities of cloud rivals like Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL). Microsoft, for instance, has made substantial investments in OpenAI, while Google has invested in Anthropic previously. This move also highlights the ongoing competition among cloud companies to align with AI startups that are reshaping the industry.

Notably, Anthropic will work on developing technology for Amazon’s in-house Trainium and Inferentia chips, potentially increasing the demand for AI-powered chips. This partnership is expected to enhance both Anthropic’s AI models and Amazon’s chip technology and AI infrastructure.

While Anthropic continues its agreement with Google, it is also boosting Amazon’s Bedrock service, offering early access to Amazon’s customers for features like AI customization. This collaboration aims to ensure that future versions of Anthropic’s AI models, such as Claude 2, will be available on Amazon Bedrock, a move crucial for enterprise usage.

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