Amazon considers new multi-billion investment in Anthropic

Cloud computing giant Amazon is reportedly in talks for a second multi-billion-dollar investment in artificial intelligence (AI) startup Anthropic.

The Information reported on Thursday that Amazon is negotiating the potential new investment in Anthropic, which would mirror the initial $4 billion deal the two companies struck last year.

However, this latest potential investment could come with a catch. The report said Amazon is pushing for Anthropic to use a significant number of servers powered by the cloud computing firm’s own AI chips, known as Trainium.

This request comes as Anthropic currently prefers using Amazon servers equipped with Nvidia-designed AI chips. The final investment amount could reportedly hinge on the number of Amazon chips Anthropic agrees to incorporate.

“Amazon has asked Anthropic, which uses Amazon’s cloud services to train its AI model, to use a large number of servers powered by chips developed by the cloud computing major,” the report said, citing a person familiar with the matter.

Anthropic, which was co-founded by former OpenAI executives and siblings Dario and Daniela Amodei, secured a $500 million investment from Google-parent Alphabet Inc. last year. Alphabet also promised to invest another $1.5 billion over time.

“Anthropic’s visionary work with generative AI, most recently the introduction of its state-of-the-art Claude 3 family of models, combined with Amazon’s best-in-class infrastructure like AWS Trainium and managed services like Amazon Bedrock, further unlocks exciting opportunities for customers to quickly, securely, and responsibly innovate with generative AI,” said Swami Sivasubramanian, vice president of data and AI at Amazon Web Services, in the release announcing the initial $4 billion Amazon investment.

The potential new Amazon investment highlights the complex dynamics between cloud providers and AI developers, as companies jostle for position in the rapidly evolving AI landscape.

“For Amazon, promoting its Trainium chips could reduce reliance on Nvidia hardware and potentially lower costs,” the Information report said. “However, Anthropic may face technical hurdles in adopting Amazon’s chip technology, as the associated software is less mature than Nvidia’s widely used CUDA platform.”