Google commits to investing $2 billion in AI startup Anthropic
By MYBRANDBOOK
Solidifying its relationship with the startup ecosystem, Google has committed to investing $2 billion in the artificial intelligence company Anthropic. The deal is structured as a convertible note, a type of debt that will convert to equity at the startup’s next funding round. This announcement follows another large convertible note investment into Anthropic from Amazon.com Inc. for up to $4 billion earlier this year.
With this financing, Alphabet Inc.’s Google invested $500 million with a commitment to add $1.5 billion more in the future. The investment is in addition to the $550 million Google put into Anthropic earlier this year.
Before the financing, Google also signed a major cloud agreement with Anthropic, according to some reports.
“The cloud deal, in which Anthropic will use Google’s suite of computing services, was even larger than the latest investment, and will stretch over multiple years,” the person familiar with the matter said.
For both Google and Amazon, investments in startups like Anthropic are a way to cement relationships with the companies shaping the next wave of AI. This is also seen as a way to nudge these startups to use their proprietary cloud tools. If AI grows to become ubiquitous, as some experts predict, it will require vast computing resources. That means AI companies will be lucrative cloud customers in the future.
According to sources, Anthropic runs primarily on a combination of its own servers and computing power rented from Google Cloud Platform. Google, which had already invested millions in Anthropic, was reluctant to commit the kind of sum Amazon ended up investing.
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