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Amazon Spends Another $4 Billion to Join Artificial Intelligence Vortex

The AI war continues。Amazon announced on September 26 that it will invest $4 billion in artificial intelligence company Anthropic, which is the latest twist。The move is similar to Microsoft's $10 billion investment in ChatGPT maker OpenAI and puts Amazon at the center of an artificial intelligence vortex that is continuing to sweep Silicon Valley and beyond.。

The AI war continues。Amazon announced on Sept. 26 that it will invest $4 billion in San Francisco-based artificial intelligence company Anthropic, the latest twist。The move is similar to Microsoft's $10 billion investment in ChatGPT maker OpenAI and puts Amazon at the center of an artificial intelligence vortex that is continuing to sweep Silicon Valley and beyond.。

Anthropic was founded in 2021 by former OpenAI employees to focus on building safe and reliable artificial intelligence systems.。But Amazon didn't just unload a dump truck full of hundred-dollar bills on Anthromic's doorstep, becoming part of the AI conversation.。

The tech giant is taking this move for two main reasons: to better compete with rivals Microsoft and Google parent Alphabet in the cloud industry, and to bring generative artificial intelligence to Amazon's storefronts.。

Gene Munster, managing partner at Deepwater Asset Management, explained: "It's now clearer that (Amazon) can't miss。"。"They're not just doing this because Google and Microsoft are making investments.。They're doing it because these investments and progress are so huge that they need to act。"

Amazon's investment in Anthropoic isn't the first time the two companies have come together.。Anthropic has made its Claude large-scale language model available through Amazon Web Services (AWS), enabling enterprise customers to build AI products for their users.。

So why would Amazon spend $4 billion on a company that already has a relationship??Anthrophic said in a statement that doing so would mean Amazon's customers would use Anthropi's AI arsenal more, including the ability to "fine-tune" and "customize" models.。

This also means that Amazon can build on a large number of base models, including large language models provided through the Bedrock platform.。Bedrock is a one-stop shop for AWS customers that provides users with a base model that supports the generation of artificial intelligence platforms。

In other words, Bedrock is where AWS customers can choose the model they want from Anthropoic, Stability AI, and even Amazon's own models to build the resulting AI product into their own software.。

Rowan Curran, senior analyst at Forrester, explained: "While Microsoft procures its large language models primarily through its collaboration with OpenAI, Amazon has some local models in addition to its collaboration as part of Bedrock, as well as other partners as part of the broader AWS Marketplace.。"。

He added: "This reinforces Amazon's position that they are a player in the generative AI market and that they are doing it in a multi-pronged way.。"。

The move will also help Amazon take on rivals Microsoft and Google in the cloud computing market.。Such a high-profile announcement by Amazon via Anthropoic suggests it won't let its biggest competitor steal customers' attention。

It will also help allay investor concerns that Microsoft and Google, not to mention other players like IBM, are moving faster than Amazon.。

Wedbush analyst Scott Devitt wrote in a note to investors on Monday: "Amazon's prioritization of AI has been an area of debate among investors in recent quarters, and we believe today's announcement marks a new urgency in Amazon's strategy to further integrate generative AI into its AWS service suite."。"。

He added: "In our view, the agreement has the potential to accelerate the adoption and deployment of additional generative AI capabilities by AWS customers, and should allay investor concerns that Amazon is not as aggressive in generative AI as its peers."。"。

AWS isn't the only way for Amazon to benefit from its in-depth study of generative AI.。The company could also use Anthropic's technology and its own knowledge of artificial intelligence to improve the consumer shopping experience on Amazon's website.。

Imagine being able to search for products needed for a particular occasion or life event, rather than individual items。

Munster explained: "Instead of going to Amazon and saying I'm looking for a blue sport coat, go and say I'm going to the wedding next weekend and need something, including a blue sport coat.。And then naturally there will be a conversation that humans will be part of the discovery。"。

With companies like Google and Microsoft introducing generative AI to their respective search products, it's no surprise the e-commerce giant will add the technology to its product search capabilities.。

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