Amazon (AMZN) -) shares ticked higher after the cloud and retail giant unveiled plans to invest as much as $4 billion in artificial-intelligence startup Anthropic.
Terms call for San Francisco-based Anthropic to receive an initial $1.25 billion from Amazon, with the option of taking a further $2.75 billion.
The deal trains Anthropic's large-language models on chips purchased from Amazon. The e-retailing and cloud giant, in turn, will get access to Anthropic's AI technologies and build them into its cloud-services offerings while taking what it called a minority stake in the AI startup and ChatGPT rival.
Anthropic, which was founded by former OpenAI executives including its CEO, Dario Amodei, earlier this year struck a similar deal with the cloud division of Alphabet's (GOOGL) -) Google.
“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 Chief Executive Andy Jassy in a statement.
“Customers are quite excited about Amazon Bedrock, AWS’s new managed service that enables companies to use various foundation models to build generative AI applications on top of, as well as AWS Trainium, AWS’s AI training chip. And our collaboration with Anthropic should help customers get even more value from these two capabilities.”
Amazon at last check were up 0.9% at $130.28.
- Get exclusive access to portfolio managers and their proven investing strategies with Real Money Pro. Get started now.
Amazon, which has lagged Google and Microsoft (MSFT) -) in this year's rapid race to develop and deploy AI technologies, could use the Anthropic investment to springboard its efforts, particularly in the cloud space, heading into the final months of the year.
Jassy told investors in early August that while "most people are talking about the application layer, specifically what OpenAI has done with ChatGPT," further layers and investment opportunities remain.
"We think AWS is poised to be customers' long-term partner of choice in generative AI. We're also continuing to make meaningful progress in building new customer experiences that can meaningfully change what's possible for customers in our business long term," he said. "Amazon Business is one of our fastest-growing offerings with a $35 billion annual gross sales run rate."
Get investment guidance from trusted portfolio managers without the management fees. Sign up for Action Alerts PLUS now.
