Amazon Stock In Focus As Firm Invests Another $4B in Open-AI Rival Anthropic: Retail Reaction Tepid

Shares of Amazon.com Inc. ($AMZN) slipped nearly 1% as markets opened on Friday after the e-commerce giant announced that it’s investing another $4 billion in Anthropic, an artificial intelligence (AI) startup run by Microsoft-backed ($MSFT) OpenAI. 

This marks Amazon's third investment in Anthropic, following an initial $1.25 billion investment in Sept. 2023, which also made Amazon Web Services (AWS) the startup’s primary cloud provider.

In March, Amazon invested another $2.75 billion in Anthropic, making it Amazon’s largest outside investment in three decades. 

In this new deal, AWS will not only remain Anthropic's primary cloud provider but also become its main training partner. Anthropic will leverage AWS Trainium and Inferentia chips to train and deploy its future AI models, according to the company’s blog post. 

Amazon said in a statement that although the current transaction brings its investment in Anthropic to $8 billion, it will still remain a minority investor, which means it doesn’t have a seat on the board.

Amazon.com Inc. Sentiment and Message Volume on Nov 22 as of 10:00 a.m. ET | Source: Stocktwits

Retail sentiment around the stock has dipped into the ‘bearish’ (43/100) territory even though chatter has increased to ‘extremely high’ from ‘normal’ a day ago. 

Retail investors on Stocktwits are not optimistic about the stock crossing the $200-mark again.

 

Anthropic, the company behind Claude — a chatbot similar to ChatGPT and Gemini — marks Amazon's strategic move to stay competitive in the generative AI race against industry giants like Google ($GOOG , $GOOGL), Microsoft, and Meta Platforms Inc. ($META).

In addition to Amazon’s backing, Google has invested $500 million in Anthropic, with plans to commit another $2 billion over time.

The company has also formed a partnership with Palantir Technologies Inc. ($PLTR) and AWS to deploy its Claude AI models to U.S. intelligence and defense agencies. Under this agreement, Claude 3 and 3.5 models will be integrated with Palantir’s AI Platform (AIP) and hosted on AWS’s cloud infrastructure.

Amazon’s shares have gained 33% this year, outperforming the broader market.

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