Tech giants are backing artificial intelligence startups, often investing huge sums in exchange for access to the technology.
Tech giants are spending unprecedented sums of money to invest in artificial intelligence startups to avoid falling behind in the generative AI boom.
In 2023, investors pumped $29.1 billion combined into nearly 700 generative AI deals, an increase of more than 260% in value from the prior year, according to PitchBook. Whether going the building or investing route, there are a finite number of companies that can afford to play in the market. In addition to developing the chips, Nvidia has emerged as one of Silicon Valley's top investors, taking stakes in a number of emerging AI companies, partly as a way to make sure its technology gets widely deployed. Similarly, Microsoft, Google and Amazon sometimes offer cloud credits as part of their investments.
The cloud companies are saying, "Come to us, work on our platform, have native access to the latest and greatest AI models, and also use our infrastructure," Havemeyer said. "It's also part of a much larger ecosystem play." Amazon's biggest bet is Anthropic, pouring in a total of $4 billion so far. The company has also invested in open source AI platform developer Hugging Face.and Nvidia. Alphabet and Nvidia are also investors in Runway ML, a generative AI company known for its video-editing and visual effects tools. Others in Nvidia's portfolio include Mistral, Perplexity and Cohere.
"I think we're starting to see some some creativity and dealmaking," said Newman. With respect to Amazon's agreement with Anthropic, he said an acquisition would be "a lot harder than investing."
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