Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Amazon has invested a further $4bn in artificial intelligence start-up Anthropic, doubling its total investment in the company to $8bn, as Big Tech’s race to dominate the generative AI sector intensifies.
The deal will be Amazon’s biggest-ever venture investment, after it committed an initial $1.25bn in the San Francisco based-group in September last year, increasing that to $4bn at the end of March.
The funding is one of a number of investment partnerships struck between AI start-ups and so-called hyperscalers, or large cloud service providers, over the past year.
Microsoft has invested more than $13bn in OpenAI, while backing French AI start-up Mistral and Abu Dhabi-based G42. Google has a deal with Cohere, where it provides cloud infrastructure to train the Canadian start-up’s AI software.
Dario Amodei, co-founder and chief executive of Anthropic, said its AI software Claude had “a year of breakout growth”.
“Our collaboration with Amazon has been instrumental in bringing Claude’s capabilities to millions of end users across tens of thousands of customers,” he added. “We’re looking forward to working with Amazon to train and power our most advanced AI model.”
As the race to build more powerful AI systems accelerates, the capital-intensive nature of the technology has resulted in consolidation in the space.
Founders and staff at AI start-ups such as Adept, Inflection and Character AI have been hired by Amazon, Microsoft and Alphabet respectively. The Big Tech groups paid billions of dollars in deals designed to absorb the best staff from the fledgling AI companies while stopping short of full takeovers.
Big Tech companies have become the major funders in the space, as they develop AI software, while building out cloud infrastructure to run AI services built by third-party customers.
Anthropic was founded by former OpenAI researchers and is known for its chatbot Claude, which outperforms OpenAI’s GPT-4 on a number of industry benchmarks. It has also previously received $2bn in investment from Google.
The new deal with Amazon deepens Anthropic’s technical partnership with the online retail giant’s cloud and chip products, but does not preclude it from working with other companies such as Google or Nvidia.
Amazon is already working to embed Anthropic’s Claude models into its next-generation version of its Alexa speaker, to help power the “conversational” AI system.
Capital expenditure at the four biggest hyperscalers — Amazon, Microsoft, Meta and Google — grew more than 62 per cent on the year before, to about $60bn during the quarter, according to recent financial filings.
Meta and Amazon were among those to point to further increases in spending next year, while reassuring the market of the demand for generative AI infrastructure and services.
Amazon’s bet on Anthropic comes at a time of deepening scrutiny from regulators in the US, UK and EU, over concerns that deals between Big Tech and the most prominent AI start-ups may pose anti-competitive risks.
The UK’s competition authority recently reviewed Google’s deal with Anthropic but did not flag it for further investigation.
