E-commerce and cloud computing giant Amazon (NASDAQ:AMZN) has announced a further investment of $2.75 billion in artificial intelligence (AI) startup Anthropic, which competes with OpenAI’s ChatGPT. This investment is part of an earlier agreement in which Amazon committed to investing approximately $4 billion in Anthropic. Initially, Amazon had invested $1.25 billion to enhance its AI efforts and remain competitive against industry rivals such as Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL).
Per the agreement, Anthropic is using Amazon Web Services (AWS) as its primary cloud provider for developing future foundation models (FMs) and other critical workloads like safety research. Additionally, the startup will use AWS Trainium and Inferentia chips for building, training, and deploying its FMs. Anthropic will also provide AWS customers with access to the next generations of its FMs on Amazon Bedrock. Bedrock is AWS’s fully managed service that provides access to high-performing third-party FMs for building generative AI applications.
AWS customers have gained access to the most powerful Anthropic AI models as part of this strategic collaboration. AMZN highlighted that its customers are leveraging Amazon Bedrock to build their generative AI applications with Anthropic’s Claude AI. Particularly noteworthy is Claude 3 Opus, the most intelligent model of Anthropic, which has demonstrated superior performance in several areas compared to other models, including OpenAI’s GPT-4. Access to high-performing models from Anthropic and other companies on AMZN’s Bedrock will likely drive AWS’s business and, in turn, its overall financials.
Amazon’s AI Push
Amazon continues to direct its investments towards AI to enhance its competitive positioning and accelerate growth. The company Introduced specialized AI training chips, dubbed Trainium, and inference chips, called Inferentia. Moreover, it recently unveiled Trainium2, the next-generation training chip boasting fourfold faster training performance and triple the memory capacity of its predecessor.
The company is augmenting its AI offerings by facilitating access to leading large language models (LLMs) from Anthropic, Cohere, Meta (NASDAQ:META), and Stability AI through Bedrock. Additionally, the company has developed its own LLM, Titan.
The company’s leadership remains optimistic about its AI endeavors and expects its investments to drive billions of dollars of revenue in the future.
What is the Prediction for Amazon Stock?
Wall Street is bullish about Amazon’s prospects. 41 analysts cover AMZN stock, and all recommend a Buy. Amazon stock is up about 85% in one year. Analysts’ average AMZN price target of $209.59 implies 16.55% upside potential.
