Amazon completes its largest venture investment with $4 billion funding in AI startup Anthropic

Amazon is set to make its largest external investment yet, sinking $2.75 billion into AI start-up Anthropic. This is part of a larger funding venture, initially announced in September, where Amazon pledged to invest up to $4 billion. Anthropic, seen as a leading force in generative AI, is known for its foundation model and chatbot Claude, which competes with OpenAI and ChatGPT.

The deal leaves Amazon with a minority stake in Anthropic and no board seat. In the past year, Anthropic has secured five funding deals, totalling about $7.3 billion. The company's products directly compete with OpenAI's ChatGPT. News of Amazon's investment follows the recent release of Claude 3, Anthropic's newest suite of AI models. The company claims these are its fastest and most powerful models yet, outperforming OpenAI's GPT-4 and Google's Gemini Ultra on industry benchmark tests.

Generative AI has seen a surge in investment in recent years, with a record $29.1 billion invested across nearly 700 deals in 2023. As part of Amazon's investment agreement, Anthropic will use AWS as its primary cloud provider and Amazon's chips to train, build and deploy its foundation models. Other tech giants, including Microsoft and Google, have also invested in Anthropic.

However, the increasing complexity of AI models has led to potential risks, and Google recently had to take its AI image generator offline after users discovered historical inaccuracies. Anthropic's Claude 3 does not generate images, but allows users to upload images and other documents for analysis. Amazon's previous largest venture investment was in electric vehicle maker Rivian, where it invested over $1.3 billion.