Google Plans Up to $2B Anthropic Investment
Google has agreed to invest up to $2 billion in generative AI startup Anthropic, who confirmed the deal after a report in a Wall Street Journal. The total for Anthropic from Google could reach $2.5 billion after a $500 million investment from Google earlier this year. The $2 billion commitment comes just weeks after Amazon announced its own plan to invest up to $4 billion in the startup, best known for its Claude generative AI chatbot.
Anthropic Cash Deluge
Anthropic has been on a funding bonanza this year. Immediately ahead of the Amazon investment, Anthropic raised $100 million from SK Telecom, which followed a $450 million round in May. That money has helped fuel the rapid development of new and improved variations of Claude and its LLMs, such as the 100,000 token context window expansion for its chatbot. The company also updated the smaller and faster version of its Claude AI model in August with the debut of Claude Instant 1.2. Claude Instant 1.2 brings in some of the enhancements added to the larger and more powerful Claude 2 model released in July. Meanwhile, Anthropic claims thousands of companies are working with the Claude API. The list includes Quroa’s Poe generative AI chatbot hub, DuckDuckGo’s DuckAssist tool, productivity app, and Notion’s writing assistant, Notion AI. Anthropic showed at least one direct revenue plan in September when it began offering a paid version of Claude called Claude Pro. The $20 per month chatbot offers quintupled usage and faster access compared to Claude’s free service.
The escalating backing of Anthropic by AI’s leading commercial players seems poised to make it the foremost OpenAI alternative. With Google and Amazon now heavily invested, Anthropic is likely to be treated as the primary challenger. While risky, the billions committed reflect how crucial it is for tech giants to have access to top-tier generative AI models. As Microsoft is learning, exclusive access can drive substantial cloud growth. With Anthropic’s funding now in the billions thanks to Google and Amazon, the battle lines for commercial AI supremacy are being drawn. The race is on to see which firm can best leverage its emerging generative AI advantage.
With two tech titans placing huge bets on the startup, Anthropic looks positioned to emerge as the leading alternative to ChatGPT creator OpenAI. Amazon and Google have their own large language models, but neither has gained as much enthusiasm from cloud customers as what OpenAI has made exclusive to Microsoft Azure. With OpenAI adoption booming on Azure, rivals Amazon Web Services and Google Cloud risk missing out if they lack access to a preferred large language model. Some companies are even trying Azure solely for OpenAI access, which can lead to shifting additional workloads.
As pointed out by Voicebot founder Bret Kinsella in our Synthedia newsletter, Anthropic represents an investment in a different market than voice assistants like Alexa and Google Assistant. Its AI foundation model aims to power thousands of enterprise applications, making it attractive for the tech firms’ cloud divisions. As generative AI continues as a proxy war for the cloud computing market, Amazon and Google both may see Athropic as a way to maintain their place in the field.
“OpenAI has been first to market and first to enthusiasm across the generative AI spectrum. GPT-3 in 2020 captured a lot of interest and ultimately led to several new software companies basing their businesses on the technology,” Kinsella wrote. “Amazon’s and Google’s investments are likely to have the second-order effect of making Anthropic the primary OpenAI alternative, a self-fulfilling prophecy. They have invested heavily in the company and will benefit if it emerges as a comparable rival to OpenAI. Others have seen that vote of confidence and will treat Anthropic accordingly.”
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