Amazon Pours Another $4 billion into Anthropic

It’s not quite Christmas yet, but Amazon is putting cash in the stocking of its favorite AI startup and then maybe a lump of coal in Nvidia’s. 

Anthropic announced that it has raised a fresh $4 billion from Amazon, its biggest backer. This brings Amazon’s total investment in the startup to $8 billion, and crucially, this new cash is intended to help Anthropic shape the in-house semiconductor chips that Amazon is working hard to perfect so it can take a crack at Nvidia’s market dominance.

Playing Catch-up

What OpenAI is to Microsoft, Anthropic is to Amazon. Both tech giants have staked their future in the generative AI industry on huge strategic investments into startups. Microsoft has been the most open-handed with its cash: At last count, it had invested a total of $13 billion in OpenAI, but Amazon is closing that gap with its latest funding of Anthropic.

Anthropic says that despite forking over mountains of cash, Amazon remains a minority investor. But that doesn’t stop Amazon from embedding Anthropic’s tech into its own, and vice versa:

• In a press release on Friday, Amazon said the investment was designed to “deepen strategic collaboration” with Anthropic, which includes a provision that Anthropic will use Amazon’s cloud service AWS as its “primary training partner.”
• The newly deepened partnership also means that Anthropic will be helping Amazon’s chip subsidiary, Annapurna Labs, build its “Trainium” semiconductor chips.

Antitrust Ricochet: Amazon isn’t the only Big Tech giant with a stake in Anthropic. Google has sunk $2 billion into the company as well, but the US Department of Justice could unwind that deal as part of its broader antitrust case against Google’s search product, Bloomberg reported last week.