Why Amazon's $4 billion AI startup bet has 'predator moves' against Microsoft and Google written all over it

• Amazon plans to invest $4 billion in AI startup Anthropic, the firm announced Monday.
• Anthropic is a competitor to OpenAI and is best known for its large language model Claude.

Amazon is set to invest up to $4 billion in Anthropic, a leading rival to ChatGPT-creator OpenAI, as it prepares to up the stakes in the AI wars.

The deal gives Amazon a minority stake in Anthropic, while the startup will use AWS cloud and Trainium, a chip purpose-built by Amazon to rival Nvidia's processors and support the training of AI models.

Anthropic, which bills itself as an "AI safety and research company," was founded in 2021 by former employees of OpenAI, and has since become one of the fastest-growing AI companies having raised $750 million before Amazon's backing.

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It is the developer behind Claude, an AI assistant it describes as a "friendly, enthusiastic colleague or personal assistant" that can respond to text inputs and instructions in a more conversational way than ChatGPT.

The investment by Amazon marks ongoing competition in the AI wars, as major companies take bets on emerging, cutting-edge startups. Google has also invested in Anthropic, while Microsoft is a major investor in OpenAI. The benefit to startups is getting access to expensive cloud compute and infrastructure as they train new models.

Conor Grennan, dean of students and head of generative AI at NYU Stern, wrote in a LinkedIn post that "this Anthropic deal has predator moves against Microsoft and Google written all over it."

Grennan outlined three reasons: Implementing useful AI features from Anthropic into AWS would cement its cloud dominance; Anthropic's use of Amazon's AI chips is a bolster against Nvidia; and finally, the partnership could strengthen Alexa.

Other commentators also see strategic advantage for Amazon.

In a post on X, influential tech commentator and former Uber engineer Gergely Orosz said AWS becoming Anthropic's " primary cloud provider" was a blow to Google's cloud division, Google Cloud Platform (GCP), given the search giant is also a financial backer.

The question here is not how AWS closed Anthrophic: but how GCP lost them.

Google invested $300M months ago & Anthrophic should have used GCP as their preferred cloud provider. Would have been a major win for GCP. Instead:

"Anthropic selects AWS as its primary cloud provider." https://t.co/wTxe7VLRon

— Gergely Orosz (@GergelyOrosz) September 25, 2023

NYU Stern's Grennan added that Anthropic successfully scaling up "could translate into billions in revenue for AWS."

Amazon said that AWS customers will be able to gain access to Anthropic's technology, with Anthropic set to provide "early access to unique features" around customization and fine-tuning capabilities.

"We have tremendous respect for Anthropic's team and foundation models, and believe we can help improve many customer experiences, short and long-term, through our deeper collaboration," said Amazon CEO Andy Jassy.