Amazon invests additional $2.75B into AI startup Anthropic

Amazon (AMZN) has announced it will invest another $2.75 billion into generative AI startup Anthropic. This will conclude its initially promised $4 billion investment in the company. Amazon will maintain a minority stake in Anthropic without a board seat.

Yahoo Finance Tech Editor Dan Howley joins Market Domination to break down the latest developments for Amazon and Anthropic as other tech competitors form AI alliances.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

Editor's note: This article was written by Nicholas Jacobino

Video transcript

JOSH LIPTON: Amazon making an additional $2.75 billion investment in the artificial intelligence company. Yahoo Finance's tech editor Dan Howley joining us with more. Dan.

DAN HOWLEY : That's right, yeah. This is the second part of a larger investment that Amazon made. $4 billion is the total.

They originally made the first part of the investment. And now this is where we're moving on in big time with Anthropic. And so essentially, it's going to give Amazon a little more say in what goes on in Anthropic. It also means that Anthropic is going to use Amazon's AWS.

And really it just shows how important it is for a company to almost have a AI division or not really part of the company, but another AI firm, kind of, under its wing, right? So you have Microsoft and OpenAI and now you have Amazon and Anthropic. And this is going to be a big deal specifically for Amazon because, to date, they've been relatively quiet when it comes to generative AI.

They do offer a ton of models that you can get access to. They have been doing everything that Microsoft's been doing, that Google's been doing, but they just haven't been very loud about it as Microsoft has. They're also not hitting consumers. That's the other thing.

You have Microsoft, which is talking directly to consumers, as well as enterprise customers big time. You have Google, which is going consumer and enterprise big time. Amazon is going enterprise and, you know, it's not something that you're hearing about. But it seems as though they want that to be more well known and hence this announcement for this $4 billion investment.

JARED BLIKRE: All right, so we got this big investment in Anthropic. You talked about-- you touched on that partnership that Microsoft has with OpenAI. If I'm Apple, am I looking in the mirror saying, do I need a partnership with somebody big here? Because it seems like that's, kind of, the direction things are going. And very different circumstances, but is that a valid concern for some of these other companies that you have to be in on the ground floor with somebody?

DAN HOWLEY : Yeah, I mean, look, Apple is reportedly-- "Bloomberg" originally reported it and then I think "The Times" also reported that they're going to be-- Apple wants to potentially work with Google and Gemini to get those models onto the iPhone. Now, that would be in the cloud. It wouldn't be on device.

There is a Gemini-- a version of Gemini, Gemini Nano, that does run on device. Apple already has a neural engine built into its iPhones. It's been doing that for years before anyone else was doing that. So it could be a benefit to them, but they're also working in-house.

And Apple, I mean, just look at--

JARED BLIKRE: And they're going to use Amazon chips for this new partnership with Anthropic too.

DAN HOWLEY : Yeah.

JARED BLIKRE: So there's a deal there, Amazon and AWS. It's like we don't see the public-facing-- the public-facing Amazon is what we see and what we know. But AWS has just been this juggernaut that's existed for, what, 15 years now.

DAN HOWLEY : Yep.

JARED BLIKRE: They got their own chips. And like how big is this for Amazon just based on that factor?

DAN HOWLEY : I mean, for them, it really is huge. They're going to basically-- what they're doing here is showing that they are a part of this broader conversation. They should be taken seriously.

And yeah, you're right, they've been building these chips for a while. They were doing it. Microsoft says that they're working on chips at this point. They don't have chips yet. Google, sure, they have chips as well.

But Amazon has been doing this for quite a while and now they're starting to make some hay about it. And they have their Bedrock platform where you can go in, get access to these different models, that's very important as well. But I think the fact that they can say, look, Anthropic, the Claude models, they're with us. They're, again, under our wing. It really is, kind of, a feather in their cap.

And I think that's the real important part of this conversation is what other service can you offer? What is your special sauce? And it seems like Anthropic is going to be that for Amazon just as OpenAI is that for Microsoft.

JARED BLIKRE: Special sauce. It always comes down to the sauce. Thank you, Dan Howley.

DAN HOWLEY : For sure.