Google Backs $2 Billion in AI Startup Anthropic in Competition with Microsoft

Editorial Desk
By Editorial Desk 4 Min Read

Google is making a significant investment of up to $2 billion in Anthropic, an artificial intelligence (AI) company that competes with OpenAI.

The initial investment from Google amounts to $500 million, with an additional $1.5 billion to be invested gradually over time.

This investment marks a notable step forward in Google’s efforts to compete with Microsoft, a partner of OpenAI and the creator of ChatGPT, as major technology companies race to integrate AI into their applications.

Anthropic is the developer of Claude 2, a chatbot that rivals ChatGPT. According to CNBC, Claude 2 is already being utilized by prominent companies such as Slack, Notion, and Quora.

In a previous deal between Google and Anthropic, the tech giant invested $300 million, acquiring a stake of approximately 10% in the startup.

This investment also provided significant financial support to Anthropic, particularly during a time when the company was procuring substantial computing resources from Google’s cloud computing division, as reported by the Financial Times.

In addition to Google, Amazon has also announced its intention to invest up to $4 billion in Anthropic to compete with other AI cloud rivals. According to Amazon’s quarterly report to the US Securities and Exchange Commission, the online retailer has invested in a $1.25 billion note from Anthropic, which can be converted to equity.

Amazon’s ability to invest up to $2.75 billion in a second note is set to expire in the first quarter of 2024. The New York Times reported that Amazon’s investment will help Anthropic establish a stronger presence in AI development amidst the intensifying AI race between Microsoft, Amazon, and Google.

During a recent earnings call, Amazon CEO Andy Jassy reportedly emphasized the significant potential of AI, stating that it represents an opportunity worth “tens of billions” in the company’s cloud business, Amazon Web Services.

Read Also: IBM Unveils Advanced Threat Detection Using A.I

When it comes to investments in AI, Google has emerged as a frontrunner, having reportedly invested a staggering $30.7 billion as of March this year. The tech giant has been leveraging AI to enhance its search engine and various products, including Google Assistant.

Google has also been actively expanding its Search Generative Experience (SGE), a form of Google Search that employs generative AI to provide answers to users’ inquiries.

On the other hand, Amazon has invested approximately $10 billion in AI, utilizing the technology to improve its delivery services and voice assistant, Alexa.

According to The New York Times, Microsoft’s investment in OpenAI amounted to $13 billion. The company is utilizing AI to enhance its products and services, such as voice recognition and natural language processing.

Satya Nadella, Microsoft’s chairman and CEO, previously highlighted the company’s commitment to infusing AI across all layers of the tech stack and in every role and business process to drive productivity gains for customers.

Among the global tech companies heavily investing in AI technology, Google reportedly leads the pack.

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