Amazon to invest up to $25 billion in Anthropic; AI firm to spend $100 billion on AWS

Amazon on Monday outlined a major expansion of its artificial intelligence (AI) strategy, committing up to $25 billion in fresh funding to Anthropic as part of a long-term partnership centred on cloud infrastructure and compute capacity. The agreement comes as competition intensifies among technology firms to secure the computing power needed to train and deploy advanced AI models.

Under the deal, Anthropic will spend more than $100 billion over the next decade on Amazon's cloud technologies, deepening an existing relationship between the two companies. The investment is structured with an initial $5 billion infusion, followed by up to $20 billion tied to specific commercial milestones. This builds on the $8 billion Amazon had already invested in the AI startup.

The partnership is aimed at strengthening Anthropic's ability to scale its AI models, including its Claude family, by securing large amounts of computing capacity. The company said it expects to access up to 5 gigawatts of capacity, with around 1 gigawatt expected to come online through Trainium2 and Trainium3 chips by the end of the year.

"Our custom AI silicon offers high performance at significantly lower cost for customers, which is why it's in such hot demand," said Andy Jassy, CEO of Amazon. "Anthropic's commitment to run its large language models on AWS Trainium for the next decade reflects the progress we've made together on custom silicon, as we continue delivering the technology and infrastructure our customers need to build with generative AI."

Amazon sharpens focus on AI infrastructure

The move highlights Amazon's broader strategy of positioning itself as a key infrastructure provider in the AI ecosystem. While its own AI models, including Nova, have struggled to gain significant traction, the company continues to lead in cloud computing services that power AI development.

Amazon said it expects capital expenditure of around $200 billion this year, with a significant share directed towards expanding AI infrastructure.

The Anthropic deal also follows Amazon's earlier announcement of a potential $50 billion investment in OpenAI, signalling its willingness to back multiple major AI players as the race for dominance accelerates.

Anthropic ramps up capacity amid competition

Anthropic is focusing on advancing its models, particularly in areas such as coding and design, as it competes with other leading AI firms. The company's increased reliance on Amazon's custom chips aligns with its need for large-scale, cost-efficient compute resources.

At the same time, Amazon is seeking to expand adoption of its Trainium chips, which are designed for AI training and inference.

Following the announcement, Amazon's shares rose about 2.7 percent in extended trading.