Amazon mirrors Microsoft with AI investment

Logistics giant will invest up to $4 billion in Anthropic

Amazon is to invest $1.25 billion (£1 billion) in AI start-up Anthropic, developer of the ChatGPT rival Claude.

The move mirrors Microsoft's investment in OpenAI, which released ChatGPT last year.

ChatGPT quickly became the world's fastest-growing app, and sparked a flurry of AI interest worldwide. Soon, any tech company that didn't at least mention AI risked being left behind, even if its products didn't actually have any smarts.

Still, it's not as if AI washing is a new phenomenon.

Microsoft's investment has been paying dividends, setting the firm up as a market leader. The company has already been building AI assistant features like Copilot into Windows 11 at a system level - although confusingly, it uses the name for several different products.

Rivals like Amazon have been forced to play catch-up, and its investment in Anthropic marks the beginning of the next stage in the AI race.

"I think the playing field is starting to level off," Gartner's Jim Hare told the BBC.

Filling in the gaps

Anthropic's generative AI assistant, Claude, is similar to ChatGPT but has more recent training data (up until 2023) can produce longer answers and outperforms GPT-4 in areas like truthful QA, coding and GSM8K. That's not to say it's better - the case isn't so clear-cut - but it performs well in areas ChatGPT has struggled with.

Amazon's investment gives it a minority stake in Anthropic, and can be increased to up to $4 billion (£3.2 billion).

CEO Andy Jassy says the move will benefit both parties:

"We...believe we can help improve many customer experiences, short- and long-term, through our deeper collaboration."

Under the terms of the deal, Anthropic will use AWS as its primary cloud provider for the "majority of workloads" - although not exclusively - and will use AWS' Trainium and Inferentia chip designs to drive the foundation models underpinning its AI.

AWS has been trying to promote its own chip designs as alternatives to Nvidia's, which currently dominates the market for AI chips.

For its part, Amazon will benefit by being able to use Claude to create new customer applications, or enhance existing ones. Microsoft has a similar arrangement with OpenAI.

Amazon is not the first tech giant to recognise Anthropic's potential. Google invested $300 million in the company in late 2022, taking a 10% stake.

Google became Anthropic's preferred cloud partner at the time, but that has seemingly since been superseded by AWS.