Amazon may condition investing in Anthropic to the latter adopting its in-house chips

According to recent reports, Amazon is considering another multi-billion dollar investment in Anthropic. This would be the second investment of this kind, after the online retail giant invested $4 billion in Anthropic between September 2023, and March 2024. As part of the negotiations behind this first investment, both companies agreed that AWS would become its main cloud provider for "mission critical workloads, including safety research and future foundation model development." In particular, Anthropic committed to leveraging Amazon's custom Trainium and Inferentia chips to "build, train, and deploy its future models."

It seems that, as the partnership has progressed, Anthropic has developed a preference for Amazon's Nvidia-equipped servers. Reportedly, Amazon is conditioning a new investment in the generative AI firm to Anthropic's adoption of more Trainium-powered servers, to the point that the investment amount may depend on the number of servers Anthropic is willing to incorporate. The advantages for Amazon are obvious, especially since the company developed the Trainium and Inferentia chips precisely to reduce its spending and reliance on Nvidia's chips.

The move would also exert some additional material influence on the startup: if Anthropic's workloads become increasingly dependent on Trainium and Inferentia chips, which are nowhere as widespread and supported as Nvidia's chips and the CUDA software stack, Anthropic could face significant limitations looking forward, as it would not be able to lease servers from other providers as easily as it would if it continued to leverage Nvidia chips primarily to power its workloads. As the reports point out, the fact that Amazon can condition its investment to the adoption of its hardware highlights the intricacies of the dynamics between AI startups and their benefactors.