Amazon has added a $2.75 billion investment in the AI startup company Anthropic, marking the largest venture capital investment in Amazon's history

Source: Hard AI

Author: Fang Jiayao

To strengthen its competitive advantage in the AI field, Amazon has decided to increase its investment in generative AI.

On Wednesday, March 27th, Amazon announced an additional investment of $2.75 billion in the AI startup company Anthropic, marking the largest venture capital investment in Amazon's history.

Last September, the two parties announced an initial investment of $1.25 billion, with Amazon committing to a total investment of up to $4 billion. The investment news released on Wednesday signifies Amazon's second round of funding for Anthropic, bringing Amazon's total investment in the company close to the promised upper limit of $4 billion.

It is reported that Amazon will maintain a minority stake in Anthropic and will not have a seat on the board of directors, meaning Amazon will neither have control over the company nor directly participate in its daily management and decision-making. According to sources, this transaction is based on Anthropic's recent valuation of $18.4 billion.

Tech Giants' Battle: Amazon, Microsoft, Google Increasing AI Investments

According to PitchBook data, the term "generative AI" has almost overnight become a mainstream business vocabulary, with explosive growth in the field over the past year. Investments in 2023 reached a record $29.1 billion across nearly 700 transactions.

As competition in AI technology intensifies, tech giants such as Amazon, Microsoft, and Google are ramping up their investments in AI startups to ensure their leading positions.

Amazon has established a mutually beneficial partnership with the generative AI startup Anthropic. Under the agreement, Anthropic will use Amazon as its primary cloud services provider and leverage Amazon's in-house chips to train, build, and deploy its foundational models. Amazon has been developing its own chips in hopes of competing with NVIDIA.

Meanwhile, Microsoft continues to increase its investment in OpenAI. With the startup's valuation surpassing $29 billion, Microsoft's investment in OpenAI has now reached $13 billion. Microsoft's Azure cloud services are the exclusive computing provider for OpenAI, meaning the success of OpenAI will directly drive growth in Microsoft's cloud business.

Additionally, Google is not lagging behind, as it has agreed to invest up to $2 billion in Anthropic, including a $500 million cash injection. Salesforce is also one of the supporters of Anthropic.

It is worth noting that the tech giants' increased bets on startups are related to the increasingly stringent antitrust scrutiny.

With antitrust scrutiny becoming stricter, the seven major tech companies - Amazon, Microsoft, Apple, NVIDIA, Google, Meta, and Tesla - are forming closer partnerships with other startups. According to PitchBook data, these large companies are increasing venture capital investments to offset the impact of reduced acquisition activities According to Pitchbook, the investment amount in the field of AI and machine learning by these seven technology companies soared to $24.6 billion last year, compared to only $4.4 billion in 2022. At the same time, the number of mergers and acquisitions by large technology companies decreased from 40 in 2022 to 13 last year.

Brendan Burke, an artificial intelligence analyst at Pitchbook, said in an interview, "The giants invest in startups that have the potential to disrupt the market, partly to increase their own sales, as these startups often use their products, so they are more like partners than competitors."

Anthropic's "multimodal" technology leads the generative AI field

Public information shows that in the past year, Anthropic has successfully completed five financing transactions, totaling approximately $7.3 billion. With this new investment from Amazon, the company's total financing amount has exceeded $10 billion.

This achievement demonstrates Anthropic's technological strength and market competitiveness in the generative AI field. Anthropic is mainly engaged in research and development in the generative AI field, and its foundational models and chatbot Claude can compete with OpenAI's ChatGPT and even surpass OpenAI's GPT-4 and Google's Gemini Ultra in some aspects.

Earlier this month, Anthropic announced its new generation model suite, marking the company's first offering of "multimodal" functionality in generative AI, adding options such as photos and videos. This advancement signifies a new stage in the development of generative AI technology.

It is worth mentioning that the company was founded by former senior executives and employees of OpenAI, which has laid a solid foundation for its AI technology research and development. With the launch of Claude 3, Anthropic is expected to continue to maintain a leading position in the generative AI field, bringing more advanced solutions to the enterprise and consumer markets.

However, the multimodal functionality and increasingly complex AI models also bring more potential risks. Recently, Google's AI image generator for its Gemini chatbot received widespread attention on social media due to historically inaccurate and questionable responses, leading to its decision to take it offline.

Unlike other models, Anthropic's latest AI model suite, Claude 3, does not generate images; it only allows users to upload images and other documents for analysis.

Daniela Amodei, co-founder of Anthropic, stated earlier this month, "Of course, no model is perfect, and I think that's a very important point. We have worked very hard to make these models as capable and secure as possible. Of course, there are still times when the models produce some fictional content."