Tech giant Google has invested around $300mn in the artificial intelligence start-up, Anthropic, which highlights the growing trend of large tech companies investing in new generation start-ups that are pioneering in “generative AI”. This cash-for-computing deal showcases the influence of Big Tech companies and the increasing demand for cloud computing resources to handle the giant AI models. The investment further cements Google’s position in the AI arm’s race and its efforts to catch up with Microsoft, which has taken the lead in the fast-growing AI market thanks to its work with OpenAI. The deal sees Google taking a 10% stake in Anthropic and providing the start-up with significant computing resources through Google’s cloud computing division.
What is Anthropic?
Anthropic is one of many companies in the field of generative AI that is seeking to develop sophisticated computer programs capable of writing scripts and creating art in mere seconds. This type of AI technology is paving the way for the future, with various industries including healthcare, finance, and entertainment utilizing AI for automating tasks and for better decision-making. Both OpenAI and Anthropic are among the leaders in this field, with OpenAI’s breakthrough AI systems, including its popular chatbot, ChatGPT. Meanwhile, Anthropic’s intelligent chatbot called Claude is still under development.
Anthropic Investment Details
The $300mn investment from Google’s cloud division, headed by former Oracle executive Thomas Kurian, comes at a time when Anthropic has already raised over $700mn from various investors. Its biggest investor, Alameda Research, which is the crypto hedge fund of FTX founder Sam Bankman-Fried, invested $500mn in the start-up before filing for bankruptcy last year. The filing by FTX’s bankruptcy estate identifies Anthropic as an asset that could assist creditors with their recoveries.
This investment also highlights the AI race and the intense competition between Google and Microsoft, which has already invested $1bn in OpenAI three years ago. Google’s relationship with Anthropic is, however, limited to acting as the start-up’s tech supplier, and not to integrating its technology into its own services. Google’s cloud division is also working with other AI start-ups such as Cohere and C3 to secure a larger foothold in the AI market.
The filing in Delaware, where Anthropic is incorporated, reveals that the start-up has two classes of stock, one of which carries 10 times the voting rights of the other. This dual-class stock arrangement is commonly used by tech founders to maintain control and dilute the influence of outside investors. Anthropic was established in 2021 when a group of researchers led by Dario Amodei left OpenAI after a disagreement over the company’s direction. The team’s primary concern was that Microsoft’s first investment in OpenAI could shift the company’s focus from the safety of advanced AI towards more commercial aspects.
Although Google and Anthropic have declined to comment on the investment and the extent of Google’s involvement in Anthropic’s business, this investment is set to boost Anthropic’s finances and help Google catch up with Microsoft in the AI market. As technology continues to advance, companies such as Google and Microsoft are at the forefront of investment in AI technology, seeking to stay ahead of the curve in this fast-growing field. With the demand for AI on the rise, it is likely that we will see more such investments from large tech companies in the future.