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Amazon doubles down on Anthropic, completing its planned $4 billion investment

Amazon on Wednesday invested another $2.75 billion in growing artificial intelligence powerhouse Anthropic, following an outstanding option last September. The $1.25 billion it invested at the time must be producing results, or perhaps they’ve realized there’s no other horse to back it up.

The September deal put $1.25B into the company in exchange for a minority stake, as well as some tit-for-tat agreements, such as Anthropic continuing to use AWS for its broad computing needs.

Amazon reportedly has until the end of Q1 to decide whether to increase its investment to up to $4B, and we’re right before that deadline, and the company has decided to commit the maximum amount.

Anthropic’s AI model is one of the very few that competes at the highest level of capability (however you define it) and is available at scale for enterprises to deploy internally or in user-facing applications. OpenAI’s GPT family and Google’s Gemini are others in the mix, but upstarts like Mistral may soon threaten this fragile trio.

For whatever reason, lacking the ability to develop adequate models on their own, companies like Amazon and Microsoft have had to look to other companies (mainly OpenAI and Anthropic) instead. Both stand to gain enormously from aligning themselves with one of these wealthy rivals, and so far haven’t seen much negative repercussions.

After (one has to assume) a closer look at how Amazon makes its AI sausage, there’s actually very little we can glean from Amazon’s decision to invest as much as possible.

It makes too much strategic sense for these companies to pour money into artificial intelligence because they have huge funds accumulated specifically for this purpose (and when they can’t outspend their competitors, they outspend their competitors). The AI ​​world right now is a bit like a roulette table, with OpenAI and Anthropic representing black and red. No one really knows where the ball will land, especially companies that can’t predict or create the technology themselves. But if your nemesis is betting on red, then you can only bet on black.

Especially if you can bet on black at a discount – which is what Amazon did, as it could have invested at Anthropic’s September valuation, which was certainly lower than it is today.

That said, if things look sketchy there — like they did with Inflection before Microsoft launched its attack — Amazon could pull out, or simply invest less than the full $2.75 billion in top-up funding. But it could send a confusing signal that no one wants to exit, especially existing multi-billion dollar investors.

We know Anthropic has a plan, and this year we’ll find out what Amazon, Apple, Microsoft, and other multinational companies think they can do to monetize this supposedly revolutionary technology.

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