Anthropic's Golden Fork in the Road
Anissa Gardizy
Feels like a bit of a fork-in-the-road moment for Anthropic. One path:
Amazon is discussing making a second multibillion-dollar investment in OpenAI rival Anthropic, according to a person involved in the discussions. The new deal is similar to Amazon’s initial $4 billion dollar investment in the startup, which was struck last year. But this time, Amazon wants Anthropic to make a concession.
The cloud giant is asking Anthropic, which uses Amazon’s cloud services to train its AI, to use a large number of servers powered by chips developed by Amazon, this person said. The problem is that Anthropic prefers to use Amazon servers powered by Nvidia-designed AI chips.
While there are clear echoes of the OpenAI/Microsoft deal here, there are also plenty of differences because the market is more mature, with more options now. At the same time, everything now is also significantly more expensive and moving faster with far more rivals. So yes, it seems like Anthropic has to make a call here. They clearly need the cash and Amazon seems willing to give them the cash. But with a catch that's more of an ask than what Microsoft required of OpenAI: use not just our cloud, but our chips.1
This would effectively lock Anthropic into being more of an Amazon affiliate than it currently is. Right now, Anthropic smartly has a Google hedge in the form of a deal with Google Cloud to ensure they're not fully locked into AWS. But these Amazon AI chips are not going to run on GCP. And presumably Anthropic is going to need to re-write their software stack to work on these chips versus using Cuda with NVIDIA's chips, which makes toggling between AWS and GCP obviously easier.
I've been wondering for some time if and when Amazon might just buy Anthropic. Beyond the cloud and chip elements, it also feels like they sure could use them – and indeed may use them – to help with the next-gen 'Remarkable Alexa', which remains remarkably behind schedule. Of course, much as with Microsoft and OpenAI, the current regulatory regime would never allow such a deal to happen. But that regime is on the verge of changing so... There's an element of this which feels like a tee up to an even larger deal. Or at the very least, an option on such a deal. For both sides.
Anthropic will undoubtedly say they don't aspire to be acquired by Amazon, but the reality of the market is shifting fast. The burn at these firms is just incredible and still rising. The amount of compute and as such, capital, to train the next generation of models is likely to put such feats out of reach to all but a few companies. Anthropic can only get there with the help of Amazon or Google or the like. OpenAI got their money. It should last them all of a year maybe. Amazon and Google and Meta can burn until the cows come home. So...
At the same time, Anthropic has to be looking over at OpenAI and seeing what a nightmare their Microsoft relationship has become. The married couple that obviously should divorce, but cannot – at least not yet. But they're increasingly acting in ways that suggest they're divorcing. It's certainly enough to make any AI startup reconsider walking down the aisle with a Big Tech bride.
OpenAI does have that clause in their prenup whereas if they can achieve AGI, they're free. (And that definition of 'AGI' which has long been up for debate is going to be even more hotly debated next year, one imagines.) Perhaps Anthropic can bake in some other terms to any marriage that can make it more palatable.
They also need a dowry. Here's a potential one:
A new deal could bring the companies even closer. A senior Amazon official privately said Anthropic CEO Dario Amodei earlier this year discussed his interest in using a large-scale AI data center server cluster to develop technology, similar to the ambitious data center plans of rivals such as Elon Musk’s xAI and OpenAI, according to a person who spoke to the official. It isn’t clear whether Amazon has committed to building a supercomputing cluster for Anthropic.
Just building out massive server farms to train AI in these various clouds isn't enough anymore. You need to build a specialized "AI supercomputer" with hundreds of thousands of GPUs. And that means billions more spent with NVIDIA – unless you can use your own chips to do so...
M.G. Siegler
M.G. Siegler
M.G. Siegler
1 And yes, per the reporting, it sounds like there was some element of Anthropic using Amazon's "Trainium" chips previously baked into deals, but in a small way. This would be a much larger iniative -- something which it also sounds like OpenAI said "no thanks" to when Microsoft asked...