E-commerce and cloud computing giant Amazon is set to inject $4 billion into Anthropic, an artificial intelligence (AI) startup founded by former OpenAI members. The move, which will give Amazon a minority stake in Anthropic, is seen as the company’s major foray into generative AI, a space currently dominated by OpenAI, Microsoft, and Alphabet.

Anthropic to Move Most of Software to AWS

Amazon plans to invest $4 billion in AI startup Anthropic to strengthen the e-commerce giant’s position in the generative artificial intelligence space. Shares of Amazon climbed more than 1% in Monday trading.

Under the terms of the deal, Anthropic will transfer most of its software products to Amazon Web Services (AWS) data centers and use the cloud unit’s homegrown chips to train the AI models powering its chatbots and other applications. The startup will also secure a major financial boost to help it settle the substantial costs required to train and operate these models.

As part of the agreement, Amazon will also acquire a minority stake in Anthropic, a Bloomberg report said. If the investment hits nearly $4 billion, as the report suggested, it would mark the single-largest corporate deal directly related to AWS, which has been mainly focused on building its products rather than using the technology built by other companies.

Amazon Doubles Down on Generative AI

After seeing breakneck growth in recent years, AWS has become the world’s biggest seller of on-demand computing power and data storage. However, Amazon’s subsidiary has been lagging in the emerging field of computer models trained to generate content such as text, images, and video, mainly because it has lacked a top product and a high-profile industry partner.

Meanwhile, Amazon’s tech peers Microsoft and Alphabet have invested significantly in AI and large language models (LLMs). ChatGPT, currently the most successful generative AI product developed by OpenAI, runs its software on Microsoft’s data centers. The tech giant invested $10 billion into OpenAI earlier this year and equipped its Azure Government service and Bing with the GPT-4 technology.

Amazon’s investment in Anthropic can be seen as the company’s most significant foray into generative AI. Anthripic’s foundational AI model, Claude, was already available as part of Amazon’s Bedrock offering.

Interestingly, Anthropic was founded by former OpenAI members. The startup secured over $1 billion in funding, $400 million of which came from Google owner Alphabet.

This article originally appeared on The Tokenist

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