Amazon announced a colossal $2.75 billion investment in AI startup Anthropic.
Anthropic’s Claude 3 Opus is officially the most powerful LLM on the planet, marginally usurping heavyweight GPT-4 on the LMSys leaderboard.
Anthropic has received billions in funding from numerous sources, including Amazon and Google, becoming the chief rival to OpenAI.
Amazon is now shoveling coal in Anthropic with a new influx of funds, adding to the company’s previous $1.25 billion investment. This brings its total commitment to a staggering $4 billion. This deal, valued based on Anthropic’s last $18.4 billion valuation, is one of the biggest bets of the year.
Swami Sivasubramanian, Amazon’s vice president of data and AI, said of the partnership: “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.”
Amazon’s move to invest in Anthropic is timely, following Microsoft’s major coup by bringing ex-DeepMind’s Mustafa Suleyman from Inflection to head its CoPilot team. Microsoft later paid $620 million for the rights to sell access to Inflection’s Pi models through its Azure Cloud.
Amazon will maintain a minority stake in Anthropic without a board seat, indicating a partnership to foster innovation while allowing it to maintain its strategic autonomy.
This is key, as Anthropic has carved a distinctive niche in AI research with its focus on “Constitutional AI.”
Amazon’s willingness to let Anthropic maintain its creative direction is reassuring. It’s questionable whether Microsoft affords OpenAI that opportunity.
Attention from regulators
Big Tech’s tactics to mop up smaller AI players haven’t gone unnoticed by regulators.
The US Federal Trade Commission (FTC), under the leadership of Chair Lina Khan, who has a reputation for ruthlessly pursuing tech deals, announced a market inquiry into the investments and partnerships between AI developers and major cloud service providers.
In November 2023, the FTC announced it would enhance its Civil Investigative Demands (CID) for AI companies. Khan said at that time, “Much is uncertain about what the future of this technology will look like.” “But the FTC has made clear that there is no exemption from the [antitrust] laws on the books.”
The FTC has questioned OpenAI about its dealings with Microsoft and warned Reddit about licensing its data ahead of its recent IPO.
Each acquisition or investment attempts to seize or maintain dominance in the rapidly evolving AI arena, where alliances are both complex and vital to success.
