Jostling for the Future of Tech
Amazon AMZN will invest $4 billion in artificial intelligence company Anthropic.
This is a company competing with ChatGPT.
It’s just another chess move in what could symbolize as the beginning of the war in generative artificial intelligence.
I do believe this could be the last iteration of the internet as humans know it because the next big “upgrade” will be uploaded into the physical human itself.
That is what developments in companies like Neuralink are telling us.
It’s not surprising that many of the big tech firms are taking strategic bets on the future of artificial intelligence.
This trend mirrors the past seminal trends where the end game turns into a winner-takes-all sweepstakes.
I am not going to sit here and say this will be better for the consumer on the internet as a whole, it mostly won’t.
This next iteration of the internet will become cloudier because consumers won’t know who is a chatbot and who isn’t.
The critical takeaway here is that the internet will become less smooth for consumers, but absolutely great for the few technology firms that harness generative artificial intelligence to build revenue.
Even chatbots are on record for not knowing who is a chatbot or who is a human.
What does that mean?
Soon, we will see chatbots talking to chatbots for money.
No humans needed.
In this case, big tech earnings revenue for their chatbot capabilities will explode and the ones that do it best with harvest the most contracts.
That is terrible for certain platforms that rely on authentic human interaction like online dating.
For some subsectors like cybersecurity, computers will be fighting computers and whoever has the best AI software will win out.
Amazon now has real skin in the game and the deal includes Anthropic using its custom chips to build and deploy its AI software.
Amazon also agreed to incorporate Anthropic’s technology into products across its business.
People familiar with the deal said Amazon has committed to an initial $1.25 billion investment in two-year-old Anthropic, a number that could grow to $4 billion over time depending on certain conditions.
This is peanuts for a company as rich as Amazon.
Google invested more than $300 million in Anthropic in May. Salesforce (CRM) has also invested in a series of AI startups, including Anthropic and OpenAI rival Cohere.
Amazon, which runs the largest cloud-computing business, has been shifting its strategy somewhat in backing AI startups.
Large language models, the algorithms that power chatbots such as ChatGPT require huge amounts of capital to build and train, and startups spend that money largely on cloud-computing costs. Of the billions of dollars that OpenAI has raised from Microsoft (MSFT), much of it has been spent on the tech giant’s AI business Azure.
Despite the excitement and investment in AI, it still makes up only a fraction of the revenue flowing into cloud-computing businesses.
All this is right now is positioning as the real revenue payout is much later down the road and I am talking years.
Whoever acquires the best pieces of the AI infrastructure now and sets the rules of the road, will basically box out everyone else.
Amazon has now clearly thrown their hat in the ring.
Trade AMZN in the short-term and hold for the long-term.
