Amazon invested an additional $2.75 billion in growing AI powerhouse Anthropic on Wednesday, following an option it left open last September. The $1.25 billion he invested at the time must be producing results, or perhaps they have realized there are no more horses available to back.
The September deal put $1.25 billion into the company in exchange for a minority stake, and some deals, such as Anthropic, continue to use AWS for their extended computing needs.
Amazon reportedly had until the end of the first quarter to decide whether to increase its investment to the maximum of $4 billion, and here we are just before the deadline and the company has decided to throw in the maximum amount.
Anthropic’s AI models are one of the few that compete at the highest levels of capability (however you define that) but are available at scale for enterprises to develop internally or in user-facing applications. OpenAI’s GPT series and Google’s Gemini are the others up there, but newcomers like Mistral may soon threaten this fragile trio.
Without the ability to develop sufficient models themselves for whatever reason, companies like Amazon and Microsoft have had to act vicariously through others, notably OpenAI and Anthropic. The two have reaped huge benefits from allying themselves with one or the other of these moneyed competitors, and so far haven’t seen much of a downside.
What we can take from Amazon’s decision to invest the maximum after (one has to assume) a very close look at how they make the AI sausage there is, really, very little.
It makes a lot of strategic sense for these companies, which have huge war chests saved up for just this purpose (overwhelming rivals when they can’t out-innovate them) to pour cash into AI. Right now the AI world is a bit like a roulette table, with OpenAI and Anthropic representing black and red. No one really knows where the ball will land, least of all the companies that couldn’t predict or create this technology themselves. But if your bitter enemy puts his chips on red, it only makes sense to bet on black.
Especially if you can bet on black at a discount — that’s what Amazon got here, as it could invest in Anthropic’s September valuation, which is certainly lower than it is today.
That said, if things looked sketchy there—as Inflection must have looked before Microsoft stepped up—Amazon could have backed out or simply invested less than the full additional $2.75 billion. But that may have sent a mixed message that no one wants to get out there, least of all the existing multi-billion dollar investors.
We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft, and other multinationals think they can do to monetize this supposedly revolutionary technology.
