Google expands investment in AI firm Anthropic

USA – Google is reportedly making a significant investment exceeding US $1 billion in the artificial intelligence (AI) company Anthropic, adding to the approximately US $2 billion it had already committed to the firm.

According to sources cited by the Financial Times (FT) on January 22, this move is part of Google’s strategy to strengthen its position in the competitive AI market.

Anthropic, known for its advanced AI model Claude, is benefiting from Google’s continued support as the tech giant aims to enhance its AI capabilities and compete with other major players like Amazon and Meta.

While Google originally developed the foundational technology enabling AI models like Claude, it has struggled to effectively commercialize its AI innovations.

Investing in Anthropic provides Google with an opportunity to bridge that gap and stay relevant in the rapidly evolving AI space.

In addition to Google’s backing, Anthropic is reportedly close to securing another $2 billion from venture capital investors.

This deal could bring the company’s valuation to an estimated US $60 billion. However, the AI landscape remains highly competitive, with rivals such as OpenAI, xAI, Meta, and Microsoft aggressively advancing their own AI technologies.

Notably, Anthropic had previously raised US $8 billion from Amazon, which plans to incorporate Anthropic’s Claude AI model into the upcoming version of its Alexa assistant.

These collaborations highlight the growing trend of AI startups forming close ties with major tech companies.

The generative AI market, featuring players like Anthropic, OpenAI, Google, Amazon, Microsoft, and Meta, is projected to exceed US $1 trillion in revenue within the next decade.

Amazon and Microsoft, OpenAI’s main backer, are heavily investing in AI startups while simultaneously advancing their own technologies.

This dynamic has not escaped the scrutiny of regulators. During President Joe Biden’s administration, the Federal Trade Commission (FTC) investigated the partnerships between cloud service providers like Google and AI developers such as Anthropic.

The FTC’s report, released toward the end of Biden’s term, cautioned against practices by big tech firms that could stifle competition.

“As companies rapidly deploy generative AI technologies, enforcers and policymakers must stay vigilant to guard against business strategies that undermine open markets, opportunity, and innovation,” said FTC Chair Lina M. Khan in a news release accompanying the report.

She emphasized the risks of partnerships that could lead to monopolistic practices, limit startups’ access to essential AI resources, or expose sensitive data.

However, with Khan set to step down in the coming weeks, industry insiders reportedly feel more optimistic about the growing collaborations between big tech companies and AI startups.