This week, Amazon completed the second phase of a deal announced last September, when it committed to investing up to $4 billion in OpenAI rival Anthropic. The additional $2.75 billion invested is Amazon’s largest check ever into another company and yet another signal of how critical the development of large language models has become to Big Tech. 

The logic is simple: Amazon needs to offer models through AWS that compete with the OpenAI-powered offerings of its arch cloud rival, Microsoft, and Anthropic is the best alternative that exists. If we rewound the clock back to when Big Tech could make large acquisitions without them being blocked by regulators, I’m sure Amazon would have tried to buy Anthropic outright.

Instead, it’s passively investing billions of dollars and telegraphing that it only has a minority stake with no board seat. Conveniently for Amazon, Anthropic has meanwhile agreed to spend $4 billion on AWS over the next several years.