Amazon has announced that it will invest another $2.75bn in Anthropic, marking the largest investment from the tech giant yet as it looks to compete in the GenAI race.
Anthropic, a leading GenAI startup based in San Fransisco, released its ChatGPT rival chatbot Claude in March 2023.
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Following an initial $1.24bn investment in September, the two companies confirmed that Amazon would invest $4bn in total.
Anthropic confirmed it was using Amazon Web Services (AWS) as its primary cloud provider for mission-critical workloads, future foundation model development, and safety research.
Anthropic has raised around $7.4bn over the past year.
“GenAI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next,” said Swami Sivasubramanian, vice president of data and AI at AWS cloud provider.
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By GlobalDataAmazon’s investment comes as cloud providers look to stay ahead in the GenAI race. Alphabet’s Google also previously agreed to invest up to $2bn in Anthropic.
The investing spree in AI has come under fire by the US Federal Trade Commission, which announced it would launch a “market inquiry into the investments and partnerships being formed between AI developers and major cloud service providers.”
The commission will probe Microsoft‘s OpenAI deal and Google and Amazon’s Anthropic deals. The recent flurry of AI partnerships has come under fire for their circular nature—by investing in AI startups, some watchdogs have accused the companies of funnelling cash back into their cloud business, which then shows up as revenue.
This form of investment known as “round-tripping” can be illegal, especially if it is misleading investors.
The US saw a decrease in the value of cloud deals in 2023, following the industry peaking in investment in 2021.
According to GlobalData's deal database, the value of deals in 2023 totalled $19.1bn. This marked a significant decrease from 2021 when deals totalled $54bn.
According to GlobalData forecasts, the total cloud computing market will be worth $1.4trn in 2027, having grown at a compound annual growth rate of 17.1% from $638.6bn in 2022.
