Amazon pumps another $2.75bn into Anthropic

• The generative AI sector continues to attract major investments
• The market is poised for ever more intense rivalry as Anthropic, a main competitor of OpenAI, gets a boost from Amazon
• The move takes the tech giant’s total investment in Anthropic to $4bn

Amazon has completed its largest-ever external investment by ploughing an additional $2.75bn into Anthropic to take its total investment in the AI company to $4bn, adding fuel to the fire in the market for generative AI (GenAI) services.

The tech giant’s $2.75bn investment in Anthropic follows its initial funding of $1.25bn made in September 2023. At the time, the company unveiled its intentions to invest “up to” $4bn to make Anthropic’s foundation models available to customers of its cloud computing subsidiary, Amazon Web Services (AWS).

As marketing executives know, “up to” provides companies with a lot of wiggle room, and Amazon could have easily capped its investment in Anthropic below its stated threshold. But it has stumped up the full amount, signalling a significant level of confidence in the capabilities of its large language model (LLM) development partner, claiming that this step helps it deepen its “commitment to advancing generative AI”.

Amazon says its work with Anthropic on bringing “the most advanced” GenAI technologies to customers globally “is only beginning”. The pair’s collaboration involves AWS being used by Anthropic as its primary cloud provider for mission-critical workloads, including safety research and future foundation model development. Anthropic will also use AWS Trainium and Inferentia chips to create, train and deploy future models, and has agreed to provide AWS customers with access to future generations of its foundation models on AWS’s fully managed service, Amazon Bedrock. This includes Anthropic’s new series of models, dubbed Claude 3, which was launched earlier this month and has been touted as more capable than other models available today, including the technology developed by the AI company’s main rival – Open AI – and its multimodal LLM.

“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,” stated Swami Sivasubramanian, VP of data and AI at AWS.

Amazon is not the only fan of Anthropic from the hyperscaler community. In February 2023, Google Cloud was chosen by the AI company as its cloud provider, and the two share a vision to co-develop AI computing systems. The partnership was expanded later that year, with Anthropic adding Google Cloud’s security services to its arsenal of services, and it has become one of the first companies to deploy at scale Google Cloud’s AI accelerator, the TPU v5e. Earlier this month, Anthropic also announced that Claude 3 Haiku and Claude 3 Sonnet are now generally available on Google Cloud’s Vertex AI platform.

And, of course, telcos are also keen to harness the power of GenAI for various efficiencies and to gain a competitive edge.

One such operator is SK Telecom (SKT), the South Korean telco giant that not only has been vocal about its vision to become an AI company for some time now but has also put money where its mouth is – including a $100m investment in Anthropic in August 2023 – see SK Telecom to develop telco-optimised LLM with AI partner Anthropic.

SKT, one of the founding members of the Global Telco AI Alliance alongside the likes of Deutsche Telekom, e&, Singtel and SoftBank, told TelecomTV earlier this year that the alliance works closely with Anthropic, as well as its rival OpenAI to advance its work on building telco-specific LLMs – see Telco giants form JV to push telco-specific LLM plan.

And the news on the new financial injection into Anthropic from Amazon will surely be seen as a positive sign from all companies, including from the telco industry, that have placed a bet on the AI specialist and its potential growth. While its position compared to that of OpenAI might be relatively minor – Anthropic’s valuation is estimated at $18.4bn, while OpenAI’s is said to be around $80bn – support from the likes of Amazon will ensure its longevity in the GenAI domain as market leaders are established and smaller hopefuls fade away.

- Yanitsa Boyadzhieva, Deputy Editor, TelecomTV