Amazon Invests Billions in AI – and Could Become a Major Play in the AI Race Dear Reader, There has certainly been no shortage of advancements as companies compete in the artificial intelligence (AI) arms race this year.
From chatbots to robots, semiconductor chips to supercomputers, and regulations for a booming revolution, tech giants and startups alike have continued to dominate headlines week after week.
And the start of this week brought more major AI news: Amazon.com, Inc. (AMZN) just made its potentially biggest investment in artificial intelligence yet.
So, in today’s Market 360, let’s dive into the details of the company’s multi-billion-dollar deal. Then, I’ll share where I prefer to invest right now while the AI race rolls on. Amazon Ups the Ante in AI Race On Monday, the e-commerce and cloud giant announced that it will invest up to $4 billion in Anthropic, an AI safety and research company founded in 2021 by former OpenAI employees. Amazon committed to an initial $1.25 billion investment and will have a minority stake in the startup. Shares of Amazon rose nearly 2% midday Monday after the news. Until now, Amazon has functioned as a neutral platform among competing AI startups, preferring to provide a wide selection of AI services on its cloud infrastructure, Amazon Web Services (AWS).
It’s served as, in essence, an AI cloud-service Switzerland.
That is no longer the case.
As a part of the deal, Anthropic will now use AWS as its primary cloud provider and adopt the tech giant’s custom chips, Inferentia and Trainium. Anthropic plans to use the chips to help build, train and deploy its AI software. Amazon, in return, agrees to incorporate the startup’s technology into products across its business and to aid in the advancement of generative AI.
"We have tremendous respect for Anthropic's team and foundation models,” Amazon CEO Andy Jassy said, “and believe we can help improve many customer experiences, short and long term, through our deeper collaboration."
Dario Amodei, CEO of Anthropic, commented, “By significantly expanding our partnership, we can unlock new possibilities for organizations of all sizes, as they deploy Anthropic’s safe, state-of-the-art AI systems together with AWS’s leading cloud technology.”
One of Anthropic's “safe, state-of-the-art AI systems” that will surely benefit from this partnership is “Claude.”
Claude is the startup’s AI chatbot. Released back in March, it can generate humanlike responses to prompts, much like ChatGPT. Claude, however, is set to be a more responsible chatbot than its rivals. According to Anthropic, early users of the chatbot reported that Claude is “much less likely to produce harmful outputs.”
Now, it’s no secret that other AI chatbots, like ChatGPT and Google’s Bard, have struggled with misinformation and biases. So, Amazon’s (several) billion-dollar investment could mean a safer, more ethical future for AI chatbots.
Adam Selipsky, CEO of AWS, says that both Amazon and Anthropic “are committing that, for many years to come, future versions of Claude will be available on Amazon Bedrock, and that's important." Claude 2, the latest version of Anthropic’s model, became available on Amazon Bedrock (a service for building generative AI applications) last month.
Looking ahead, Amazon’s investment in and adoption of Anthropic’s technology could establish it as a major player in the AI arms race. Microsoft Corporation (MSFT) and Alphabet Inc. (GOOG) have already heavily invested in AI startups this year: - Microsoft invested $10 billion into OpenAI (ChatGPT’s parent company) in January.
- And Google beat Amazon to the punch when it invested $300 million in Anthropic back in May.
Personally, I think this is a smart move by Amazon. The reality is Amazon is listening to us on our smartphones and profiling us based on our online shopping, so all the AI development will help them better target their sales to their users. AI is just like our pets that study us and plot against us. Regardless, it will be interesting to see where this AI arms race leads the current tech giants. Focus on the Energy Sector Now, while this AI race continues, I’m focusing more on the energy sector.
As I mentioned yesterday, fundamentally superior energy stocks are currently a safe haven for investors.
Right now, some of the best stocks along these lines include crude oil and natural gas companies. The reality is that energy prices are set to remain high in the near term, and many energy-related stocks have exhibited tremendous relative strength of late… including the ones I recommend in Growth Investor.
Thanks to the recent strength in energy stocks, my Growth Investor stocks overall have exhibited relative strength. I continue to look for my Growth Investor Buy List stocks to continue to outperform in the upcoming weeks, especially as the third-quarter earnings announcement season gets underway in October.
While my Growth Investor Buy Lists are already well-positioned for this upcoming earnings season, I am adding two new stocks to the Buy Lists in today’s Growth Investor Monthly Issue for October. (It will be available for viewing soon!)
To learn more about these new buys – and my fundamentally superior energy stocks – join me at Growth Investor. You’ll also get immediate access to all my Monthly Issues, Weekly Updates, Special Market Podcasts and Special Reports.
Click here to become a member of Growth Investor today.
(Already a Growth Investor subscriber? Go here to log into the members-only website.) Sincerely, |
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