Published - February 6, 2023 @ 4:05 PM (EET)
Alphabet's Google Cloud reportedly invested $300 million in Anthropic, an artificial intelligence startup testing a rival to OpenAI's ChatGPT.
According to a person familiar with the deal, Google (NASDAQ:GOOGL) will acquire a stake in the startup but will not require the startup to spend the funds buying cloud services from Google.
While the Financial Times reported Google Cloud's 10% stake in Anthropic on 4 February, the startup confirmed the investment partnership in a tweet on the same day despite not disclosing any figures.
Google and Antrhopic declined to comment on the investment. Still, Alphabet CEO Sundar Pichai, on the company's fourth-quarter earnings call last week, promised it would soon add advanced AI features to its search engine.
"I'm excited by the AI-driven leaps we're about to unveil in Search and beyond," said Pichai on Thursday.
WHY IT MATTERS
The Google-Anthropic partnership follows a high-profile $10 billion investment by Microsoft Corp. (NASDAQ:MSFT) in OpenAI, building on the $1 billion the company poured into the startup in 2019 and another round in 2021.
The language model assistant that Antrhopic is using, known as Claude, is yet to be released to the public. However, the startup plans to expand chatbot access "in the coming months," it said.
Chief Executive officer, Thomas Jurian of Google Cloud, said,
"AI has evolved from academic research to become one of the biggest drivers of technological change, creating new opportunities for growth and improved services across all industries."
NOW WHAT
During its transition, cutting costs and pivoting to AI since OpenAI released its chatbot in November, Google Cloud was a bright spot in last week's earnings.
Revenue increased 32% to $7.3 billion, narrowing its operating loss in the segment from $890 million to $480 million.
Thus, in another year, it's likely Alphabet will look like a much different company, having to transform to protect its massive advertising business from threats like ChatGPT.
