March 20, 2024

Polyamory & cloud providers

Hi there, 

Amazon invested another $2.75B into Anthropic this past week.

It marks its biggest venture investment to date.

Below we’ll look at: 

• Amazon’s top 10 venture deals
• Takeaways on Amazon’s Anthropic stake
• Big tech’s AI arms race
• Where else Amazon is investing in AI: AI agents & robotics

But first, let’s talk Donald Trump.

Specifically, let’s talk about his social platform Truth Social, which trades at a slight premium to other social cos. In fact, some people are saying it trades at the best valuation multiple ever.

• Truth Social 1860.3x
• Reddit 9.8x
• Meta 9.2x 
• Pinterest 7.7x
• Snap 4.1x
• ByteDance (TikTok parent) 1.9x

If this valuation multiple holds up, Elon, the owner of X (Twitter), will be happy.

Now, on with the show. 

Amazon’s top 10 venture deals

Here’s a full list of the all-time biggest equity deals Amazon has led or backed: 

1. Anthropic - $2.75B 
2. Rivian - $2.5B 
3. Rivian -  $1.3B
4. Anthropic - $1.25B
5. Databricks - $1B
6. GRAIL - $914M
7. Rivian - $700M
8. Deliveroo - $575M
9. Aurora - $530M
10. Zwift - $450M

Takeaways

Amazon’s latest $2.75B investment in Anthropic — on top of its $1.25B investment in September — is not just an equity round.

As part of the deal, AWS will become Anthropic’s primary cloud provider and use Amazon’s chips to train its models, per the scouting report on Anthropic's CB Insights profile. 

Anthropic’s models are also available to AWS customers.

This was a selling point for this customer we spoke with who cited data security reasons. 

Like other big tech companies, Amazon wants to put itself at the heart of the AI value chain. 

It’s also backed other AI infrastructure companies like Hugging Face and Databricks in the last year. 

AI arms race

The Anthropic x Amazon deal follows similar hookups between cloud providers and AI startups. 

And the relationships are not monogamous. 

Anthropic has also raised funding (up to $2B) from Google.

Meanwhile, Microsoft has funneled over $10B into OpenAI. Oracle backed Cohere’s $270M Series C.

See where big tech is nabbing stakes in the next generation of AI startups in this map. 

Emerging focus areas in AI investments

Beyond AI infrastructure, one emerging focus area for Amazon is AI agents.

• Amazon's Alexa Fund backed Imbue, which is building an “autonomous agent” — an LLM-powered bot that can independently reason and execute tasks.
• The fund also invested in AI agent startup MultiOn in January 2024. 

Autonomous agents could have synergies with Amazon products like Alexa, making voice assistants more capable and intelligent.

The second focus area is the industrial sector — a leading area broadly for big tech’s vertical AI investments.

Applications in materials development, manufacturing, and warehousing are drawing attention as the sector races to automate operations.

For example, Amazon’s Industrial Innovation Fund has invested in companies including: 

• AI robotics safety startup Veo Robotics
• Humanoid robotics company Agility Robotics

More on big tech in humanoid robotics here.

I love you. 

Anand 

@asanwal 

P.S. Go behind the scenes of the AI 100 on April 11th. Understand what signals our analysts track to identify promising startups.

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