Amazon adds $2.75 billion to its stake in Anthropic

Amazon said Wednesday it added $2.75 billion to its investment in Anthropic, a start-up that competes with companies like OpenAI and Google in the race to build cutting-edge artificial intelligence systems.

Six months ago, Amazon invested $1.25 billion in Anthropic, making the San Francisco start-up Amazon's largest AI partner. Amazon said at the time that it had the ability to bring its total investment to $4 billion. According to financial documents, they had until the end of March to do so.

However, the additional investment shows the enormous resources tech companies are pouring into AI and is indicative of how much financial support Anthropic needs to keep up with its peers.

“We believe our strategic collaboration with Anthropic will further enhance our customers' experience and we look forward to the future,” Amazon executive Swami Sivasubramanian said in a blog post announcing the investment.

As Anthropic moves closer to Amazon, it loses much of its stake to a controversial investor. Last week, a federal judge granted approval to bankrupt cryptocurrency exchange FTX to sell its stake in Anthropic. In 2021, FTX invested $500 million in the AI ​​startup, representing a stake of about 8%.

Since then the value of that investment has increased dramatically. Anthropic's valuation tripled to $15 billion in just a year, the New York Times reported in February.

Anthropic was started in 2021 by a group of researchers from OpenAI, the company that created the ChatGPT chatbot. At the time, many of these researchers were concerned about OpenAI approaching Microsoft in a partnership that would ultimately be worth $13 billion.

Anthropic has consistently raised money because developing the systems critical for generative AI requires deep pockets, both to hire staff and secure computing power.

Amazon's investment in Anthropic is more than just an equity stake. Like Microsoft's investment in OpenAI, it includes access to artificial intelligence systems and a commitment to providing computing power. But it stops short of high-value acquisitions that could trigger an antitrust review. The Federal Trade Commission has launched an investigation into whether these types of large AI deals hinder competition. (The Times is suing OpenAI and Microsoft for copyright infringement of news content related to artificial intelligence systems.)

In a key part of the partnership, Anthropic agreed to build its own artificial intelligence using specialized computer chips designed by Amazon. Amazon said it hopes Anthropic will contribute to its efforts to meet the cutting-edge demands of artificial intelligence and collaborate on the design of specialized chips.

Amazon also has a first shot at making Anthropic's AI models available to customers of its cloud computing service, and this month announced that it will provide access to Anthropic's more powerful models, known as Claude 3.

The bankruptcy estate of FTX has agreed to sell about two-thirds of its shares in the start-up for $884 million. The majority stake went to ATIC Third International Investment, a company linked to a sovereign wealth fund in the United Arab Emirates.

Other buyers included quantitative trading firm Jane Street and the Ford Foundation, a philanthropic group. Darren Walker, president of the foundation, said in an interview that he considers Anthropic a major competitor to OpenAI.

“The fact that Anthropic has emerged and is going to be a strong competitor is a good thing for the markets, and it's a good thing for the public and the public interest,” Walker said.

David Yaffe-Bellany contributed reporting from New York.

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