Why Are Microsoft & Nvidia Pouring $15B Into Anthropic?
While the deal may sound great, Microsoft's stock dropped 2.6% on Tuesday, sparking concerns over the multi-billion-dollar deal because...
Microsoft and Nvidia invest $15B in Anthropic (the company behind the AI chatbot Claude). The company is turning into one of the biggest rivals to OpenAI, and with this investment, the competition has just intensified. Not just that, Anthropic aims to invest $50 billion of its own money to build special AI data centres in Texas and New York, raising concerns about an AI bubble. So, what is the big deal about this investment? What does this mean for Microsoft and OpenAI? What’s Anthropic promising in return? For all that, learn more.
Why Are Microsoft and Nvidia Investing?
- Notably, Microsoft and Nvidia want to partner (and be close allies) with the companies that are building the next big AI tech.
- Plus, by doing so, Microsoft can ensure that Anthropic uses its cloud services (Microsoft Azure), and Nvidia can provide its AI chips.
- Therefore, the deal benefits everyone involved.
What’s Anthropic Promising in Return?
Interestingly, Anthropic promised to purchase $30 billion in computing power from Microsoft Azure.
Here's what it means:
- Anthropic will run a massive amount of its AI work on Microsoft’s cloud.
- Several call these deals "circular AI deals” because big tech invests in AI startups and, in return, these startups spend billions back on their cloud services and chips.
What Does This Mean for Microsoft and OpenAI?
Here's the thing: Microsoft invested more than $13 billion in OpenAI and soon became a direct rival. So now:
- Microsoft is looking to strengthen its ties with Anthropic (OpenAI’s direct rival).
- Ironically, Anthropic was actually founded in 2021 by ex-OpenAI employees (including siblings Dario and Daniela Amodei).
Satya Nadella (Microsoft’s CEO) considers OpenAI as a “critical partner" and Microsoft will:
- Use Anthropic’s AI models
- Sell cloud services to Anthropic
- Work on products together
What Is Anthropic Doing Now?
A massive growth is visible at Anthropic:
- The company raised $13 billion at a valuation of $183 billion.
- Anthropic has over 300,000 business customers in finance, healthcare and software development.
- Plus, it's chat Claude and its AI models are becoming very popular.
To support this growth, Anthropic will:
- Invest $50 billion to build advanced data centres for AI training, running, and testing.
- Sign big deals with tech giants to access high-powered AI chips.
Why Did Microsoft’s Stock Fall?
Right after the announcement, Microsoft’s stock dropped 2.6% on Tuesday.
Reasons being:
- Investors believe that a huge AI bubble will soon form, overall overheating the AI industry.
- And these are "circular" AI deals.
Adepu Bindu
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