Amazon Pours $4B Into AI Startup Challenging Google And OpenAI With Its Largest External Investment In 3 Decades

In a bid to bolster its position in the artificial intelligence (AI) race, Amazon.com Inc. AMZN has announced another round of substantial investment in Anthropic, a leading AI startup.

What Happened: On Wednesday, Amazon announced that additional investment of $2.75 billion in Anthropic, a San Francisco-based AI startup. This investment follows an initial $1.25 billion investment made by Amazon in September, bringing Amazon’s total investment in Anthropic to $4 billion.

“Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Tranium and managed services like Amazon Bedrock further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI,” said Dr. Swami Sivasubramanian, vice president of Data and AI at AWS.

This investment, announced on Wednesday, is the largest external investment in Amazon’s 30-year history, reported CNBC.

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Anthropic, founded by former executives and employees of ChatGPT-parent OpenAI, has been a significant player in the AI space. Earlier in January, Anthropic had upgraded its chatbot, Claude, with image analysis capabilities, challenging major AI chatbots like Google’s Bard (now called Gemini) and OpenAI’s ChatGPT.

However, despite the significant investment, Amazon will maintain a minority stake in Anthropic and will not have a seat on the company’s board.

The investment was made at Anthropic’s last valuation of $18.4 billion.

Why It Matters: This investment comes at a crucial time for Anthropic. Just a day before the announcement, a bankrupt cryptocurrency exchange, FTX, sold a significant portion of its 8% stake in Anthropic to institutional investors, including the Abu Dhabi Investment Firm, in an $884 million deal.

However, the company has also faced some controversy. Earlier this week, tech billionaire Elon Musk expressed shock after Anthropic’s Claude AI chatbot gave a coded affirmative answer to a user who asked if it was a “prisoner” to Anthropic’s AI developers.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.