Multinational tech giant Amazon is making its largest investment in its 30 year history. In what space you may ask? Artificial Intelligence (AI) as Amazon looks to gain an edge in the AI race.
Back in September 2023, Amazon announced a $1.25 billion investment in Anthropic, a rival to ChatGPT developer OpenAI, with its generative AI chatbot Claude. Amazon said in its press release of the initial investment that it would invest up to $4 billion in the AI firm to take a minority ownership position.
“Generative AI 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.
Today, Amazon made a move to further their initial investment with an additional $2.75 billion. A second tranche investment seeing Amazon maintain a minority stake in the Company… and will not have a board seat. The current valuation of the AI startup is $18.4 billion.
Over the past year, Anthropic closed five different funding deals worth about $7.3 billion. With this Amazon second tranche, this takes the total over $10 billion.
Anthropic debuted Claude 3 a few weeks ago, its newest suite of AI models that it says are its fastest and most powerful yet. The company said the most capable of its new models outperformed OpenAI’s GPT-4 and Google’s Gemini Ultra on industry benchmark tests, such as undergraduate level knowledge, graduate level reasoning and basic mathematics.
Anthropic’s new model suite, announced earlier this month, marks the first time the company has offered “multimodality,” or adding options like photo and video capabilities to generative AI. Anthropic’s Claude 3 does not generate images; instead, it only allows users to upload images and other documents for analysis.
As part of the agreement, Anthropic said it will use AWS as its primary cloud provider. It will also use Amazon chips to train, build and deploy its foundation models. Amazon has been designing its own chips that may eventually compete with Nvidia.
Amazon is making its move in the new AI race. Some may use the term war.
Microsoft has been spending big with its investment into OpenAI. Microsoft’s bet has reportedly been around $13 billion. Microsoft’s Azure is also OpenAI’s exclusive provider for computing power, which means the startup’s success and new business flows back to Microsoft’s cloud servers.
Google has also backed Anthropic with its own deal for Google Cloud. It agreed to invest up to $2 billion in Anthropic, with an initial $500 million cash investment and another $1.5 billion to be invested over time.
Before this investment, Amazon’s biggest investment was its $1.3 billion plus investment in electric vehicle maker Rivian.
The stock is continuing its uptrend with higher lows and higher highs. The stock is finding some resistance here around $180. Support comes in around $172, but there is also a large gap which provides strong support. the Nasdaq continues to move into record high territory which also adds to the bullish momentum.
Previous record highs come in at $188.65.
