Amazon Considers $4 Billion in New Anthropic Investment

Reports indicate that Amazon.com and AI startup, Anthropic are already discussing a second multi-billion dollar investment. The cloud service provider had announced $4 billion in Amazon’s new Anthropic investment in September 2023, according to Reuters.

Amazon’s new investment is aimed at giving customers early access to the startup’s AI technology. Anthropic uses AWS cloud services to train its AI model. Amazon has asked the AI startup to use numerous servers that are powered by Amazon chips.

AI Chip Race

Anthropic prefers to use Amazon servers that are powered by Nvidia AI chips. Amazon is among the big techs that have placed orders for Nvidia’s Blackwell AI chips. Last month, the cloud computing giant announced that its Amazon Nvidia-based systems won’t be available online until early 2025.

Amazon is reportedly working hard to develop AI chips that are cheaper and faster than those offered by Nvidia. For instance, in July this year, engineers at the Austin Amazon.com chip lab are said to have developed a new server design. In July 2024, AWS unveiled a new non-AI processor called Graviton.

The Amazon Graviton4 chip offers superior efficiency and performance and comes with higher computing power and memory. Other big techs that are developing or upgrading AI chips inhouse include Google, Meta, and Microsoft.

Growing Investment

Anthropic was founded by former OpenAI executives in 2021. The company has since attracted billion dollar investments from Amazon and other tech giants. In September last year, Amazon investments in the AI startup stood at $1.25 billion with committed to invest more. In March this year, the company invested an additional $2.75 billion in the AI startup.

In January 2024, Anthropic unveiled a test version of Claude, a chatbot that offers features that are very similar to ChatGPT. Last year, Anthropic secured $500 million funding from Google’s parent company, Alphabet. The company committed to invest an additional $1.5 billion over time.

To date, Anthropic has attracted $9.7 billion in investments from big techs. This is about 50% of the investment that its rival, OpenAI has attracted.

Tough Competition

Anthropic faces stiff competition from OpenAI, which recently announced plans to expand its operations globally. The company is set to open new offices in five cities across the US, Europe, and Asia and make Singapore its global operations hub. OpenAI made its expansion plans public after it completed a funding round that raised $6.6 billion from investors and secured a $4 billion credit facility from leading banks.

OpenAI also launched its highly publicized search engine, ChatGPT search last week to compete with Google. ChatGPT search is built on OpenAI’s powerful AI model, GPT-4o and is powered by third-party content and search providers.