Amazon said on Wednesday that it had added $2.75 billion to its investment in Anthropic, a start-up that competes with companies like OpenAI and Google in the race to build cutting-edge A.I. systems.
Six months ago, Amazon invested $1.25 billion in Anthropic, making the San Francisco start-up Amazon’s most important A.I. partner. Amazon said at the time that it had the option to bring its total investment to $4 billion. It had until the end of March to do so, according to financial filings.
Still, the additional investment shows the enormous resources that tech companies are pouring into A.I. and is indicative of how much financial support Anthropic needs to keep pace with its peers.
“We believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next,” Swami Sivasubramanian, an Amazon executive, said in a blog post announcing the investment.
While Anthropic gets closer to Amazon, it has shed a bulk of the holdings of a controversial investor. Last week, a federal judge granted approval for the bankrupt cryptocurrency exchange FTX to sell its stake in Anthropic. In 2021, FTX invested $500 million in the A.I. start-up, making up a stake of about 8 percent.
The value of that investment has since ballooned. Anthropic’s valuation tripledto $15 billion in just a year, The New York Times reported in February.
Anthropic was started in 2021 by a group of researchers from OpenAI, the company that created the ChatGPT chatbot. At the time, many of those researchers were concerned about OpenAI’s growing closer to Microsoft in a partnership eventually worth $13 billion.
Anthropic has steadily raised funds because developing the foundational systems for generative A.I. requires deep pockets, both to hire staff and to secure computing power.
The Amazon investment in Anthropic is not just a simple equity stake. Like Microsoft’s investment in OpenAI, it includes gaining access to A.I. systems and commitments to provide computing power. But it stops short of the high-value acquisitions that could trigger an antitrust review. The Federal Trade Commission has begun an inquiry to see if these kinds of large A.I. deals hamper competition. (The Times has sued OpenAI and Microsoft for copyright infringement of news content related to A.I. systems.)
In a key part of the partnership, Anthropic agreed to build its A.I. using specialized computer chips designed by Amazon. Amazon has said it hopes Anthropic will help its efforts to meet the cutting-edge demands of A.I. as well as collaborate on designs of specialized chips.
Amazon also gets an early shot at making Anthropic’s A.I. models available to customers of its cloud computing service, and this month announced that it would provide access to the most powerful Anthropic models, known as Claude 3.
The bankruptcy estate of FTX agreed to sell about two-thirds of its shares in the start-up for $884 million. The majority of the stake went to ATIC Third International Investment, a firm linked to a sovereign wealth fund in the United Arab Emirates.
Other buyers included the quantitative trading firm Jane Street and the Ford Foundation, a philanthropic group. Darren Walker, the foundation’s president, said in an interview that he viewed Anthropic as an important competitor to OpenAI.
“The fact that Anthropic has emerged and will be a strong competitor is a good thing for the markets, and it’s a good thing for the public and the public interest,” Mr. Walker said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
