Amazon’s up to $4B investment into Anthropic makes it a complete competitor to Google, OpenAI, Microsoft, and Meta.
Anthropic, with its AI chatbot Claude, is a competitor to Bard (Google) and ChatGPT (OpenAI, Microsoft). Amazon will invest $1.25 billion into Anthropic for a minority stake and will increase the amount up to $4 billion. Amazon’s investment is being seen as a bid to compete with other tech giants with access to AI chatbots and LLMs.
Most notably, it’s synonymous with Microsoft’s $13 billion dollars worth of investment into OpenAI which was developing ChatGPT (Microsoft confirms multibillion dollar investment in firm behind ChatGPT).
In the official announcement, Anthropic said that “AWS will become Anthropic’s primary cloud provider for mission critical workloads, providing our team with access to leading compute infrastructure in the form of AWS Trainium and Inferentia chips, which will be used in addition to existing solutions for model training and deployment.”
Anthropic’s Claude 2 LLM is going to be the driving force of the Amazon tools that will develop over this partnership.
This is going to be a minority stake. It means that the corporate governance structure of the company remains the same.
From Investopedia: A minority interest refers to a stake in a company that is otherwise controlled by a parent company. This usually occurs in subsidiaries where the parent company owns more than 50% of the voting shares. Minority interests generally come with some rights for the stakeholder such as participation in sales and certain audit rights.
As per the current policies, which will remain unaffected, the company will continue to “conduct pre-deployment tests of new models to help us manage the risks of increasingly capable AI systems.”
Whereas Microsoft stands to get a 75% share of OpenAI’s profits until it makes back over $105 billion (capped profits) from the company, then switching to a 49% stake alongside other companies also sharing 49% (whereas the nonprofit keeps the remaining profit), Amazon’s investment is fairly smaller in comparison and in compensation.