Amazon (AMZN) is considering an additional multibillion-dollar investment in artificial intelligence (AI) startup Anthropic. Amazon currently has approximately $8 billion invested in the Claude model maker, including $4 billion committed in November last year. With this further investment, Amazon aims to surpass rival Alphabet’s (GOOGL) $3 billion investment in Anthropic.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Commenting on the new investment, Dan Grossman, VP of worldwide corporate development at Amazon, stated, “We quickly realized that we had many shared goals that were fundamentally critical. The size of the (existing investment) represents our ambition.” Anthropic was valued at $61.5 billion in a recent funding round and boasts an annual revenue run rate of more than $4 billion.
Amazon Aims to Bolster its AI Dominance
Amazon aims to bolster its dominance in the AI sector by partnering with one of the leading AI players in the industry. The enhanced partnership will help Amazon strengthen its AI infrastructure and cloud offerings. Amazon will also become Anthropic’s primary cloud provider and model training partner. Notably, Amazon announced “Project Rainier” in June, a state-of-the-art data center that will be used for training Anthropic’s models using Amazon’s Trainium and Inferentia chips.
Although Amazon has its own AI chips, called Trainium, the e-commerce giant has been lagging behind its rivals in developing consumer-focused models. The Amazon-Anthropic duo could surpass the high-profile collaboration between Microsoft (MSFT) and ChatGPT maker OpenAI, which is already facing challenges regarding the future of their partnership.
The generative AI market is expected to explode into a multi-trillion-dollar industry over the next few years. Tech companies are engaged in a high-stakes, intense AI race, each striving to assert its dominance with advanced AI models. Interestingly, companies are also involved in a heated talent war, luring top AI executives with multimillion-dollar annual packages.
Is AMZN Stock a Buy, Hold, or Sell?
On TipRanks, AMZN stock has a Strong Buy consensus rating based on 45 Buys and one Hold rating. Also, the average Amazon price target of $246.60 implies 10.8% upside potential from current levels. Year-to-date, AMZN stock has gained 1.4%.
