Amazon makes a shrewd move in the AI arms race

EVER since Microsoft put US$10 billion in OpenAI in January and began integrating ChatGPT into its products, people have been watching closely to see how its biggest tech rivals would respond. Google scrambled to release its chatbot, Bard. Meta launched its own large language model, LLaMA. On Monday (Sep 25), Amazon made a move it hopes can turn around the perception it had fallen behind in the AI arms race.

Its US$1.25 billion investment in San Francisco-based Anthropic, which could grow to US$4 billion and includes a minority stake, is something of a coup for Amazon and its cloud division, Amazon Web Services (AWS). Anthropic’s decision to make AWS its “primary cloud provider” for “mission-critical workloads” comes just seven months after the startup’s cloud deal with Alphabet’s Google, which had been an early investor.

Gaining Anthropic as a cloud client would alone have been cause for celebration. But the bigger victory for Amazon is that Anthropic has said it will “build, train and deploy” its new models using Amazon’s Trainium and Inferentia computer chips.