Amazon put another $2.75 billion into Anthropic, a growing AI company, on Wednesday, following through on a choice it made in September. It must be working because it spent $1.25 billion at the time, or they may have realised that there are no other horses to bet on.
The September deal gave the company $1.25 billion in exchange for a small share in it. As part of the deal, Anthropic agreed to keep using AWS for its large-scale computing needs.
Amazon was said to have until the end of the first quarter to decide if it wanted to increase its investment to a maximum of $4 billion. The deadline has just passed, and the company has chosen to put in the full amount.
Anthropic’s AI models are one of only a few that can fight at the highest levels of capability (however you define it) and are freely available for businesses to use internally or in apps that users interact with. The other two are OpenAI’s GPT series and Google’s Gemini. However, newcomers like Mistral may soon pose a threat to this weak trio.
Due to some reason, companies like Amazon and Microsoft have not been able to make good models on their own, so they have had to rely on others, mostly OpenAI and Anthropic. They have gotten a lot out of working with one or the other of these wealthy foes, and they haven’t seen many bad effects yet.
We can’t really learn much from Amazon’s decision to put in the most money after (one must imagine) getting a good look at how they do AI there.
These companies have huge war chests saved up just for this purpose—spending more than competitors when they can’t come up with better ideas—so putting money into the AI sector makes too much strategic sense. OpenAI and Anthropic are like black and red on a spinning wheel right now in the world of AI. No one, not even the companies that couldn’t guess or make this technology themselves, knows where the ball will land. But if your angry rival bets on red, it makes sense for you to bet on black.
Even more so if you can bet on black at a price, which is what Amazon did here because it could invest at Anthropic’s September value, which is almost certainly less than what it is now.
Even so, Amazon could have pulled out or spent less than the full $2.75 billion if things looked sketchy over there, just like they must have done with Inflection before Microsoft jumped on it. That, however, may have sent a mixed message that no one wants to get out there, especially investors with billions of dollars at stake.
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We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft, and other big companies think they can do to make money off of this “revolutionary” technology.
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