AMAZON STEPS UP AI RACE – Up to $4 billion deal made to invest in Anthropic

0 said it will invest up to $4 billion in cash in the high-profile startup Anthropic, in its effort to compete with growing cloud rivals on artificial intelligence.

Amazon’s employees and cloud customers will gain early access to technology from Anthropic as part of the deal, which they can infuse into their businesses. The San Francisco-based startup also committed to rely primarily on Amazon’s cloud services, including training its future AI models on large quantities of proprietary chips it would buy from the online retailing and computing giant.

The news represents perhaps Amazon’s biggest answer yet to challenges from Microsoft and Alphabet’s Google, smaller cloud rivals that have marketed or developed powerful AI this year. The deal also shows ongoing manoeuvring by the cloud companies to secure ties with AI startups reshaping their industry.

Since 2019, Microsoft has put billions of dollars into its partnership with ChatGPT’s creator OpenAI, giving its customers special access to the startup’s prose-writing, image-generating technology.

Google meanwhile helped pioneer this branch of AI and in May invested in Anthropic’s $450-million fundraising, in a relationship the startup said is not going away.

For Amazon, Monday’s deal may spell an uptick in demand, including for chips powering AI. Anthropic agreed to work on developing technology for Amazon’s in-house Trainium and Inferentia chips, for instance.