Google pumps another $1 billion into Anthropic

Google is deepening its partnership with Anthropic after it invested an additional $1 billion in the AI startup, a contender of ChatGPT maker OpenAI.

A fresh injection of funding for the AI start-up is underway after the tech giant reportedly made another huge investment into the startup, which is known for its Claude AI models. The move also strengthens Alphabet-owned Google’s position in the AI race as it continues to challenge competitors like Microsoft, Amazon, and Meta Platforms.

Google raises its stake in Anthropic

Google’s latest capital injection in Anthropic comes on the backdrop of heightened competition for AI supremacy with tech giants like Microsoft and Oracle working together on large-scale projects, such as the $100 billion Stargate Project. Google’s additional investment was reported by the Financial Times which cited sources familiar with the matter.

Prior to this new tranche of investment, Anthropic had already received close to $2 billion, and the startup is said to be on the cusp of securing a further $2 billion from Silicon Valley venture capital investors, led by Lightspeed Venture Partners.

The deal with Lightspeed Venture Partners is expected to triple Anthropic’s valuation to around $60 billion.

The latest investment from Google is part of its broader effort to diversify its AI business and capitalize on its early role in developing AI technologies. Despite pioneering the foundational technology for models like Claude and OpenAI’s GPT-4, Google has faced challenges in commercializing these advancements, the Financial Times report stated.

Anthropic, founded in 2021 by former OpenAI employees, has introduced innovative features, including AI agents capable of performing complex tasks on behalf of users. The startup is a major competitor of OpenAI in the AI foundation model space.

Anthropic also attracted huge investments from Amazon

Besides Google’s investments into Anthropic, the startup has also received up to $8 billion from e-commerce and cloud giant Amazon.

In September 2023, Amazon made an initial investment of $1.25 billion in the startup and indicated its plan to invest up to $4 billion. In March of the following year, the e-commerce giant injected an additional $2.75 billion into the San Francisco-based Anthropic, completing its $4 billion investment.

However, the British competition regulator CMA cleared Amazon’s $4 billion investment into Anthropic in September last year, arguing it did not meet the threshold for in-depth review under merger regulations.

This came about following investigations by the CMA amidst wider concern that a small number of tech companies were controlling the emerging generative AI field. According to Silicon, the CMA discovered that the combined revenue and market share of the two companies in the UK were not big enough to require an in-depth inquiry under the UK’s merger rules.

In November last year, Amazon committed another $4 billion investment in the startup, announcing that Amazon Web Services (AWS) would be named Anthropic’s “primary training partner” under that deal.

According to Silicon, just like Google, Amazon is also working to embed the Claude models into its tech, including the next-generation version of its Alexa speaker.

Anthropic fiercely competes with rivals OpenAI and tech billionaire Elon Musk’s xAI, which managed to raise over $10 billion last year.

The startup’s annualized revenue reached $1 billion in December 2024, growing tenfold over the past year, the Financial Times reported.

However, profitability remains elusive due to the high costs of developing advanced AI models, with investors banking on the technology’s potential to generate trillions in value, it added.

Microsoft-backed OpenAI activated an intense AI race following the launch of its ChatGPT in November 2022. The growing popularity of the company and new product launches helped it close a $6.6 billion funding round in October, potentially taking its valuation to $157 billion.

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