The share price of Amazon Inc (NASDAQ: AMZN) rose 1.67% on Monday and continued to tick up 0.17% in an after-hours session after the report of the company investing in Anthropic, a rival to OpenAI’s ChatGPT.
AI startup, Anthropic, will be invested by the big e-commerce company, Amazon. Anthropic will deal with Amazon Web Services (AWS) data centers and train the cloud chatbots, both companies announced in Monday’s statement. The investment value was declared at $4 billion.
The world largest on-demand computing and storage seller, AWS, has been laggard in AI fronts such as text and images generation and recognition. This move is likely to fill-in those weaknesses of AWS as its CEO said Anthropic will help improve customer experiences.
Amazon’s in-house chips called Trainium and Inferentia are designed for this purpose. This makes Amazon rely on itself on both hardware and software fronts which is better for Amazon to control the cost itself.
Anthropic was founded by the OpenAI veteran and has raised over $1 billion to create a safer general chatbot. The amazon rival, Google, already has a $400 million stake in this company.
Meanwhile, AMZN is currently trading at $131 per share. The peak price last year was over almost $186 in July, while the pandemic low was at $84. AMZN current P/E ratio is over 105 which is considered very expensive as the usual interpretation would take 105 annual cycles to fully return the investment.
