HomeFinance NewsAmazon invests $4B in AI startup Anthropic, boosting innovation potential.

Amazon invests $4B in AI startup Anthropic, boosting innovation potential.

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Amazon has announced that it will invest up to $4 billion in the artificial intelligence startup Anthropic, joining other tech giants in the race to dominate the growing AI market. The deal will see Anthropic utilize Amazon Web Services and Amazon’s custom chips for its AI software, while Amazon will incorporate Anthropic’s models and software across its business. The initial investment commitment from Amazon is $1.25 billion, but it could increase to $4 billion based on certain conditions. This move is part of Amazon’s strategy to advance generative artificial intelligence, which can create content from simple descriptive phrases.

The investment in Anthropic is the latest in a series of AI-related investments by major tech companies. Earlier this year, Microsoft invested $10 billion in OpenAI and formed a partnership with the startup. Anthropic, founded by former OpenAI employees, offers a conversational AI assistant called Claude that provides humanlike responses. Amazon has been working to catch up with Microsoft in the AI arms race, launching its Amazon Bedrock offering in April to enable users to build generative AI applications. The deal with Anthropic signifies Amazon’s renewed focus on integrating generative AI into its Amazon Web Services platform.

According to Wedbush analyst Scott Devitt, the agreement between Amazon and Anthropic demonstrates a newfound urgency in Amazon’s strategy to adopt generative AI. This partnership has the potential to accelerate the adoption of generative AI capabilities for Amazon Web Services customers and addresses concerns that Amazon has been slower than its competitors in this area. Additionally, Amazon has recently announced plans to leverage generative AI to enhance its Alexa smart-home devices. Despite a decline in 2022, Amazon’s stock has risen by approximately 54% this year.

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