Amazon.com Inc (NASDAQ: AMZN) just announced plans to invest another $4 billion in Anthropic – a California-based startup that’s competing with the likes of OpenAI in a generative artificial intelligence arms race.
Shares of the tech titan are close to hitting $200 on Friday.
Anthropic is an artificial intelligence company founded by former research executives of OpenAI – and is widely known for its next-gen AI assistant called Claude.
Shares of this San Francisco headquartered firm are not yet available for the public to trade.
Anthropic to use Amazon chips
Amazon will have a total of $8 billion invested in Anthropic following the new funding that, nonetheless, does not change its position as a minority investor.
The multinational does not have representation on Anthropic’s board either – but the investment it announced this morning made Amazon Web Services the “primary cloud and training partner” for the AI startup.
Anthropic will use the Trainium and Inferentia chips from now on to train its most sophisticated AI models, as per a blog post on Friday.
Amazon’s investment in Anthropic is part of its broader push to drive growth from the artificial intelligence market that Statista forecasts will be worth $1.0 trillion over the next 10 years.
Amazon stock is currently up more than 30% versus its low in the first week of August.
Anthropic’s AI model has human-like abilities
Amazon.com Inc has decided in favor of doubling down on its investment in Anthropic only weeks after the AI startup announced new agents capable of using a computer like a human to handle complex tasks.
Its latest AI model with computer use capability can navigate websites, enter or interpret text, or even press buttons on a computer screen to execute tasks with “tens or even hundreds of steps,” as per Jared Kaplan – the company’s chief science officer.
Anthropic offers early access to that artificial intelligence tool, he revealed in a recent CNBC interview.
Anthropic launched Claude Enterprise in September as well.
Note that AMZN is not the only one among hyperscalers that’s invested in Anthropic. Google committed to investing some $2 billion in the AI startup last year as well.
Amazon stock may be headed for $285
Amazon’s commitment to strengthening its footprint in artificial intelligence is part of the reason why Wall Street has a consensus “overweight” rating on AMZN.
In fact, analysts at JMP Securities see an upside in Amazon shares to $285 which translates to a more than 40% upside from here.
Other than AI and cloud computing, the investment firm recommends owning AMZN stock for the strength of its e-commerce business as well as its large and rapidly growing advertising segment.
BofA also recommended investing in Amazon.com Inc after the launch of its Haul platform last week.
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