Google is ramping up its investments in AI by pledging an additional $2 billion in AI startup Anthropic, which competes with OpenAI. This investment is structured as a convertible note, a form of debt that can be converted into equity in the next funding round. Notably, this $2 billion investment is separate from Google's previous investment of $550 million in Anthropic earlier this year.
Amazon has also shown a keen interest in Anthropic and pledged to invest up to $4 billion in the AI startup as part of its strategy to compete with other cloud companies in the AI sector. A recent quarterly filing with the US Securities and Exchange Commission revealed that Amazon had invested $1.25 billion in Anthropic, which can be converted into equity. The company also retains the ability to invest an additional $2.75 billion in a second convertible note, with the deadline for this investment set for the first quarter of 2024.
Google has already invested $500 million in Anthropic, and this new pledge is part of a larger commitment. The tech giant has committed to investing a further $1.5 billion in the AI startup in the future. Additionally, Google has also signed a Google Cloud deal with Anthropic worth over $3 billion.
Anthropic was founded by siblings Dario and Daniela Amodei, who previously worked as engineers at OpenAI. Their dispute with OpenAI CEO Sam Altman over the safe development of artificial intelligence led them to launch their own company in 2021. The company operates a generative AI-based chatbot named Claude, similar to OpenAI's ChatGPT. Anthropic's ambitious goal is to develop more advanced versions of its AI system, which requires significant funding.
Anthropic has secured a total of $7 billion in funding this year alone. In addition to investments from Amazon and Google, traditional Silicon Valley investors such as Spark Capital and Menlo Ventures have also contributed to the company's funding.
The substantial investments from major tech players like Google and Amazon indicate the intensifying competition in the AI and cloud services sector. AI startups like Anthropic aim to push the boundaries of AI technology and require significant capital to achieve their goals.
With additional investments from tech giants, Anthropic is well-positioned to continue its development of advanced AI systems, which will further shape the future of AI technology.
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