Amazon to Invest Up to $25 Billion More in Anthropic Amid AI Spending
Surge
Anthropic also committed to spending $100
billion on Amazon technologies that can help build and deploy A.I. systems.
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Amazon will invest up to $25 billion more in Anthropic, starting
with an initial $5 billion.
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Amazon had already invested $8 billion, making it one of Anthropic’s largest backers.
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Anthropic will spend $100 billion over 10 years on Amazon’s
cloud and computing services.
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The startup will continue using Amazon’s custom AI chips (Trainium) instead of relying heavily on Nvidia.
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The deal reflects a broader trend where tech giants fund AI
startups that, in turn, purchase their infrastructure.
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Major players like Google and Microsoft are also heavily investing
in AI firms.
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Anthropic recently raised $30 billion, reaching a valuation
of $380 billion (unchanged by this deal).
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Amazon is simultaneously investing $50 billion in OpenAI, which
plans to spend over $100 billion on Amazon services.
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Amazon expects total capital expenditure of $200 billion this
year, mainly for AI data centers and chips.
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The partnership signals continued aggressive investment in AI
despite concerns about rising costs and sustainability.
Amazon
has agreed to invest as much as $25 billion more in Anthropic, the artificial intelligence
start-up that created the Claude chatbot, the companies said on Monday, the latest
in a series of mammoth deals between tech giants and A.I. start-ups.
Amazon,
which previously invested $8 billion in Anthropic, is already one of the start-up’s
largest investors. In the latest deal, Amazon plans to invest $5 billion to start,
with the potential to add $20 billion more if Anthropic hits certain milestones.
Anthropic,
in turn, committed to spend $100 billion on computing power and other services from
Amazon’s cloud computing business over the next decade. The start-up will also continue
to use specialized computer chips that Amazon has designed as an alternative to
high-priced chips from Nvidia, the Silicon Valley chip maker that dominates the
A.I. market.
The
largest tech companies are continuing to pour billions of dollars into A.I. despite
worries by some investors that the costs are too high. Over the past few years,
spending on A.I. has climbed to record heights, raising questions about whether
the boom can be sustained.
The
agreements between Amazon and Anthropic are also the latest examples of the circular
deal making at the heart of the A.I. surge. Amazon, Google, Microsoft and Nvidia
have invested huge sums in companies like Anthropic and OpenAI. In exchange, these
start-ups buy enormous amounts of computing power from the same investors.
Amazon
and Anthropic are betting that they can deliver leading A.I. technologies using
alternatives to Nvidia’s powerful but expensive chips. Over the past year, Anthropic
has become one of the largest users of Amazon’s latest chip, known as Trainium.
“Our
users tell us Claude is increasingly essential to how they work, and we need to
build the infrastructure to keep pace with rapidly growing demand,” Dario Amodei,
Anthropic’s chief executive, said in a statement.
Andy
Jassy, Amazon’s chief executive, said in a statement that Anthropic’s
bet to run its models on Amazon’s chips over the next decade “reflects the progress
we’ve made together on custom silicon.”
In
February, Anthropic completed a funding round that brought $30 billion into its
coffers, valuing the young company at $380 billion, which was more than double its
valuation from September. The new deal with Amazon does not affect Anthropic’s valuation.
Amazon
said in February that it was also investing $50 billion in OpenAI, the start-up
behind ChatGPT. OpenAI has said it will spend more than $100 billion on Amazon’s
services.
Amazon
has told investors that it expects to spend $200 billion this year on capital expenditures,
primarily to build data centers and fill them with chips
used to power A.I.
Mr.
Jassy wrote in a shareholder letter this month that the investments were not made
“on a hunch,” but reflected commitments from OpenAI and other unannounced deals.