Amazon is investing four billion dollars into Anthropic, acquiring a minority stake in the AI developer. The investment in the OpenAI competitor will allow the tech giant to launch a competitive offering against Microsoft. However it is not unique in its investment either, as Google already invested in Anthropic.
AI developer Anthropic announced Monday that it will receive a billion-dollar investment from Amazon. The exact amount could reach up to four billion dollars. The company says it will use the money to develop “reliable and high-performing foundation models.”
Anthropic immediately makes an offer back, choosing AWS as its main cloud provider to run its most critical workloads. “Charging for state-of-the-art models requires far-reaching energy resources, including compute power and research programs, and Amazon’s provisioning of compute infrastructure, among other providers, ensures that we are equipped to continue to grow in AI security and research.”
Serving business audiences
Whit what offer exactly has Anthropic managed to attract Amazon’s interest? The LLM Claude 2 is the most advanced model the AI developer currently owns. The LLM makes itself useful to the marketing department by writing copy, it solves mathematical problems, it generates code in natural language based on a prompt, and it summarizes long legal documents with ease. Considering these use cases we conclude that the model is very interesting, mainly in a business context.
A new, more powerful generation of Claude 2, Claude Next, is already in development. Amazon’s investment will certainly be used to develop this project further. Through a direct investment of $1.25 billion, the tech giant will immediately acquire a minority stake in the AI developer. The remaining $2.75 billion may eventually be going to the company, but there is no obligation to do so.
Furthermore, there is a benefit for business users in the deal. Proper support for Amazon Bedrock is promised, allowing the refining of large language models (LLMs) to the needs of the business. This is an offer from Anthropic made to Amazon, as Amazon has already been offering the Claude 2 LLM model through its own generative AI service, Bedrock, since April. For future models, it has also agreed to make them available on the AWS service. The AWS Generative AI Innovation Center, where customers can seek help from an AWS expert in building an AI application, will also be approachable for questions surrounding Anthropic models.
“Since announcing our support for Amazon Bedrock in April, Claude has seen significant organic adoption by AWS customers,” said Dario Amodei, co-founder and CEO of Anthropic. “By significantly expanding our partnership, we can unlock new opportunities for organizations of all sizes as they deploy Anthropic’s secure, state-of-the-art AI systems in conjunction with AWS’ industry-leading cloud technology.”
Anthropic as an OpenAI competitor
Indirectly, the investment also helps strengthen Anthropic’s position against OpenAI. Anthropic is already put away as a competitor to the developer of ChatGPT and DALL-E but has not yet been able to complement its offering with powerful tools. So this investment promises to change that. Surely since Amazon is not the only big name in the tech world where Anthropic has already managed to raise money, a $450 million investment from Google was already announced earlier this year.
OpenAI already acquired investments from Microsoft for its projects on several occasions. That shows the confidence of the tech world. Furthermore, the models GPT-3 and GPT-4, which serve for ChatGPT, have already been integrated into a whole series of AI products of large companies. The developer holds a unique position in the AI market, as the release of image generator DALL-E and chatbot ChatGPT filled a gap. Artificial intelligence may have been experimented with within companies or in science, but these tools certainly could not be present in everyone’s living room before these releases.
In comparison to Claude 2, that is precisely where the weakness of GPT-3 and GPT-4 lies, these models must serve general purposes in order to appeal to the widest possible audience. The model for a business audience, ChatGPT Enterprise, barely touches on this problem and is mainly put away as a model where more refinement is possible and more value is placed on privacy.
There is no denying the role OpenAI played in breaking AI technology to a wider audience. But this position does not guarantee the company’s future. Large tech companies are now betting on Anthropic’s opportunities, while OpenAI already does not appear to have a favourable future financially. Running the models for a large audience is very expensive and the revenue-generating formulas, ChatGPT Enterprise and ChatGPT Plus, followed only later and certainly do not put all users on a paying subscription.
Anthropic forms an interesting AI player for the business market with Claude 2. Now, it also manages to reach a large audience through Amazon. For Amazon, the investment is interesting to offer an offering that competes with that of Microsoft and not simply copy it.