(Nov 23): Amazon.com Inc is investing an additional US$4 billion (RM17.87 billion) in artificial intelligence (AI) startup Anthropic, boosting its stake in one of OpenAI’s chief rivals.

The new infusion, announced by the companies on Friday, follows a US$4 billion investment in Anthropic completed earlier this year. That deal included provisions that Anthropic use Amazon Web Services (AWS) data centres for some of its computing needs, as well as AWS-designed AI chips. Anthropic also has close ties with Alphabet Inc’s Google.

The latest investment “establishes AWS as our primary cloud and training partner”, Anthropic said in a blog post, adding that the startup plans to use Amazon’s AI chips to develop its most advanced models. The deal maintains Amazon’s minority stake in the company, Anthropic said. As with Amazon’s original US$4 billion infusion, this deal takes the form of convertible notes. Amazon’s initial additional investment will be US$1.3 billion, with the rest to follow.

Founded in 2021 by former employees of OpenAI, Anthropic has become one of the ChatGPT maker’s closest rivals. Its Claude family of chatbots is widely seen as among the most capable of generating text from scratch. Anthropic has gained traction selling AI software to businesses, including finance and healthcare firms. And Amazon has used its close relationship with Anthropic to bolster its credentials in AI services, offering the Claude models to clients on the AWS marketplace of AI model providers.

The additional investment from Amazon highlights the enthusiasm for AI products and the immense capital needs for building the large language models that underpin them. OpenAI raised US$6.6 billion in funding in October at a US$157 billion valuation. Elon Musk’s xAI, meanwhile, has been seeking to raise funding at a US$40 billion valuation, Bloomberg previously reported.

Anthropic chief executive officer Dario Amodei has said he expects the costs of developing larger AI models could eventually grow to US$100 billion, up from US$100 million this year. Like other leading AI developers, however, Anthropic has also seen some diminishing returns from its costly efforts to build more advanced artificial intelligence models, Bloomberg previously reported. Anthropic has seen the timetable slip for the release of its long-awaited Claude model called 3.5 Opus.

Anthropic and other AI companies have also seen their funding deals come under scrutiny from regulators who worry that big tech is using large investments and cloud computing partnerships to dominate the emerging AI sector.

The UK’s competition watchdog recently cleared the prior investments from Amazon and Google into Anthropic. But the US Justice Department is now seeking to unwind Google’s Anthropic deal in particular.

Amazon shares were little changed as the markets opened in New York on Friday. 

Uploaded by Tham Yek Lee