Google to Invest $2 Billion in AI Startup Anthropic, Following Amazon’s Lead
- ByStartupStory | October 28, 2023
Google is doubling down on its commitment to artificial intelligence, announcing a $2 billion investment in Anthropic, an AI startup competing with OpenAI. This investment comes in addition to Google’s earlier $550 million investment in Anthropic.
The new investment from Google is structured as a convertible note, a type of debt that can be converted into equity in the next round of funding, according to reports. Google had already invested $500 million in the company and has committed to a further $1.5 billion investment in the future. Interestingly, before this latest round of investment, Google had already signed a Google Cloud deal worth over $3 billion with Anthropic.
Furthermore, Anthropic has secured a multi-year deal with Google Cloud worth more than $3 billion, providing a significant boost to the startup. This deal was inked several months before Google’s additional investment.
Previously, Amazon had pledged to invest up to $4 billion in Anthropic as it aimed to compete with other cloud companies in the AI sector. In a quarterly filing with the US Securities and Exchange Commission, Amazon detailed its investments in Anthropic, with $1.25 billion invested, convertible into equity, and the potential to invest an additional $2.75 billion in a second note, expiring in the first quarter of 2024.
The founders of Anthropic, Dario and Daniela Amodei, formerly engineers at OpenAI, launched their company in 2021. Their venture was born after a dispute with OpenAI CEO Sam Altman over the responsible development of artificial intelligence.
Anthropic, previously funded by Sam Bankman Fried’s FTX, expanded its investor base after FTX’s well-known struggles, with the addition of tech giants like Amazon and Google, as well as traditional Silicon Valley investors including Spark Capital and Menlo Ventures.
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Similar to OpenAI’s ChatGPT, Anthropic operates a generative AI-based chatbot called Claude and requires substantial investment to train more advanced versions of its AI system. In total, the company has secured $7 billion in funding this year alone.
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