Anthropic Founders: Dario Amodei and Daniela-Amodei

Amazon has agreed to invest up to $4 billion in Anthropic, the generative AI firm that competes with ChatGPT-maker OpenAI, the ecommerce company announced today in a statement. As part of the deal, Amazon will make an initial investment of $1.25 billion, with plans to invest the remainder at a later stage, securing a minority position in the company.

Before this deal, Anthropic had raised $1.1 billion, including $300 million from Google in late 2022 and $100 million from South Korea’s SK Telecom earlier this year, and the company was reportedly valued at $5 billion, making it the third-highest valued AI startup globally; with the latest round and Amazon acquiring a minority stake in the company, it is safe to assume that its valuation has surpassed that of the second-ranked highest valued AI startup in the world, Scale, which is valued at $7.1 billion.

The shift of Anthropic to Amazon from Google, despite Google’s initial substantial investment, is a notable development. The two companies have announced that AWS will become Anthropic’s primary cloud provider. The AI firm that has been an AWS customer since its early days, will also use AWS Trainium and Inferentia chips to build, train, and deploy its future foundation models.

While this choice could have leaned toward Google Cloud, the fact that Anthropic is in direct competition with Google, which introduced its AI chatbot Bard earlier this year and is reportedly trialing Gemini, a more robust large language model, might explain Anthropic’s decision to establish a long-term partnership with Amazon.

The deal holds significant implications for the evolving AI landscape and the broader picture of AI development, with Microsoft having invested over $10 billion in OpenAI earlier this year, and now, Anthropic entering a strategic partnership with Amazon.

Anthropic was founded in 2021 by the brother-sister duo of Dario and Daniela Amodei, who previously held leadership roles at OpenAI. They were joined by at least nine other former OpenAI employees when they started the firm.

The San Francisco-headquartered startup build large language models, or AI systems, that it says are reliable, interpretable, and steerable. The company’s AI assistant Claude was launched earlier this year, and can be accessed through a chat-based interface, like ChatGPT, and APIs.

Anthropic currently offers two LLMs; Claude 2, their most potent model, ideal for tasks requiring complex reasoning, creativity, thoughtful dialogue, coding, and detailed content creation; and Claude Instant, a faster and more cost-effective model suitable for casual dialogue, text analysis, summarization, and document comprehension.

Access to both the chatbot and APIs is currently limited. The chatbot is only available to users in the United States and the United Kingdom. Earlier this month, Anthropic launched a paid plan for heavy users of Claude, priced at $20, in direct competition with ChatGPT Plus.

As a result of its partnership with Amazon, Anthropic will grant AWS customers across access to its upcoming foundation models through Amazon Bedrock, with early access to unique features for model customization and fine-tuning capabilities. Amazon will also use Anthropic’s models to integrate generative AI features into in its own products.

Andy Jassy, Amazon CEO, commenting on the deal, said, “We have tremendous respect for Anthropic’s team and foundation models, and believe we can help improve many customer experiences, short and long-term, through our deeper collaboration. Customers are quite excited about Amazon Bedrock, AWS’s new managed service that enables companies to use various foundation models to build generative AI applications on top of, as well as AWS Trainium, AWS’s AI training chip, and our collaboration with Anthropic should help customers get even more value from these two capabilities.”

Dario Amodei, co-founder and CEO of Anthropic, added, “We are excited to use AWS’s Trainium chips to develop future foundation models. Since announcing our support of Amazon Bedrock in April, Claude has seen significant organic adoption from AWS customers. By significantly expanding our partnership, we can unlock new possibilities for organizations of all sizes, as they deploy Anthropic’s safe, state-of-the-art AI systems together with AWS’s leading cloud technology.”