Amazon is spending billions to make sure it doesn’t fall behind in AI
With Microsoft tightly intertwined with OpenAI, and Apple, Google, and Meta stuffing their own versions of AI into pretty much all their products, Big Tech is hard at work capturing as much value — or garnering as much hype — from AI as possible. Amazon’s latest move is a $4 billion bet on Anthropic, announcing the investment in the AI startup on Friday, doubling its total stake in OpenAI’s largest rival to $8 billion. (See here for a great explainer of the web of investments in AI companies.)
Amazon’s deal will see Anthropic use AWS chips for its foundational models, and it follows Anthropic’s June release of the latest version of its AI assistant, Claude. The company says Claude outperforms OpenAI’s GPT-4o and Google’s Gemini 1.5 Pro across a range of tasks: writing, coding, solving math problems, interpreting charts, transcribing text from images, and, apparently, understanding humor.
Of capital importance
The investment is a continuation of Amazon’s (and the rest of Big Tech’s) new strategy: spend billions of dollars to make sure you don’t fall behind in AI. That doesn’t just mean passive investments in startups. Indeed, for years, Big Tech was the epitome of the capital-light business model, driving profits from intangible assets like software. Now, the tech giants are pouring billions into physical stuff, including massive data centers and custom chips.
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