Google is investing more than $1bn in OpenAI player Anthropic

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Google is making a new investment of more than $1bn in OpenAI rival Anthropic, strengthening its position in the startup as Silicon Valley titans rush to develop artificial intelligence applications.

Search behemoth Alphabet had already made about $2bn in Anthropic and was now increasing its stake in the group, according to four people with knowledge of the situation.

Anthropic, best known for its Claude family AI examples, is one of the pioneers in launching a new wave of tools for building AI companies to generate text, images and code based on user suggestions.

Google they develop the technology that brands like Claude and OpenAI’s GPT4 are built on, but are lagging behind in the race to commercialize the powerful technology. Anthropic’s investment is part of the Silicon Valley company’s efforts to diversify its AI business and take on serious competitors, including Microsoft, Meta and Amazon.

Anthropic was also in the process of saving Another $2bn from Silicon Valley venture capital investments, led by Lightspeed Venture Partners, in a separate deal expected to triple the startup’s valuation to $60bn, according to several people with direct knowledge of the covenant.

The startup is in fierce competition with rivals OpenAI and Elon Musk’s xAI, both of which raised more than $10bn last year, as well as Facebook parent Meta and Microsoft.

The new investment from Google to Anthropic adds to the total investment of $ 8bn from Amazon, the largest investment in ecommerce, announced in the last 18 months. Amazon also works on enter Claude’s examples to the next version of its Alexa speaker.

Close ties between AI start-ups and their Big Tech backers were investigated by the Federal Trade Commission during the Joe Biden administration.

Under outgoing commissioner Lina Khan, the FTC was looking at investments from Google and Amazon to collaborate with Anthropic and Microsoft and OpenAI, to assess the impact of the agreements on competition in the fledgling sector. But with Khan stepping down in the coming weeks, marketers are growing more confident in their ability to build relationships.

Anthropic’s revenue reached $1bn for the year in December, about 10 times the year before, according to a person with knowledge of the company’s finances.

However, investors do not expect Anthropic or its competitors to be profitable anytime soon, given the high costs of developing early AI models. With new developments, they believe the technology could eventually create billions of dollars in value.

“Now I am more confident than at any time in the past that we are very close to strong potential. . . AI systems are better than almost all humans at all tasks,” said Anthropic CEO Dario Amodei in an interview with CNBC on Tuesday.

Anthropic, founded in 2021 by a group of former OpenAI employees, has sought to differentiate itself from its rivals by focusing on AI safety. It has fired several OpenAI employees in recent months, including the company’s co-founder.

The group was also starting to release certain features, such as AI’s ability to control computers, and it has focused this year, along with competitors, on creating AI agents – software that can perform tasks and run the web for human users.

Google and Anthropic declined to comment.