Amazon bets big on AI startup Anthropic

Amazon is becoming a minority owner in the artificial-intelligence chatbot startup Anthropic, The Wall Street Journal reports, citing anonymous sources.

As part of a deal that includes an initial investment of $1.25 billion but could go as high as $4 billion over two years, Anthropic will use Amazon Web Services as its primary cloud provider and use Amazon-made chips in its AI software. The deal aims to remind AI companies that there are alternatives to Nvidia’s processing chips and position Amazon as a “one-stop shop for AI,” CNBC writes.

OpenAI unveiled features that allows users to speak aloud or upload a picture to prompt its AI bot, ChatGPT.

The backing is the first major investment by Amazon into a leading chatbot, in an effort to expand its artificial intelligence capabilities. As part of the deal, Anthropic will get access to AWS, one of the world’s largest sellers of on-demand computing power and data storage.

As expected, and as these deals are being structured, Anthropic will move most of its software to AWS, and use Amazon’s chips to train the models it uses to power chatbots.

The competition in the chatbot sector is intensifying, with cloud competitors Microsoft and Google already placing their bets. Microsoft has invested around $13 billion in Open AI, while Google has developed its own chatbot, Bard, and Meta has invested in its Llama platform. It’s worth noting that Google had previously invested hundreds of millions of dollars into Anthropic as well. With AI investment continuing to thrive, it’s evident that everyone wants a share of the pie.

Billions of dollars are being invested into the sector. However, it’s crucial for investors to exercise caution, conduct thorough due diligence, and develop a deep understanding of the AI landscape before diving into it.