Amazon (AMZN) backed AI (artificial intelligence) startup Anthropic’s valuation skyrocketed to $61.5 billion after the latest funding round. Anthropic successfully raised $3.5 billion in the mega round, while it had initially aimed to raise only $2 billion. The massive boom in demand for AI models and agents has led to the tripling of Anthropic’s valuation in such a short span.
Anthropic’s business is growing rapidly, with revenue hitting the $1 billion mark last year. Remarkably, the AI firm’s revenue is said to have grown by 30% so far this year. Anthropic was founded in 2021 by former research executives of OpenAI, with a mission to build “safer” AI models. Anthropic’s latest AI agents are able to assist humans in using computers and complete complex tasks, such as enter text, choose buttons, and navigate the internet based on the user’s browsing history.
Anthropic to Expand Next-Gen AI Models
The latest Series E funding round was led by Lightspeed Venture Partners, contributing $1 billion. Other investors who are enthusiastic about Anthropic’s potential and participated in the mega round included Salesforce Ventures, Fidelity Management & Research, General Catalyst, and Jane Street, among others.
Importantly, Anthropic aims to utilize the funds to develop “more intelligent and capable AI systems,” expand its computing capacity, and for research programs. Additionally, the company hopes to expand its business in Asia and Europe.
Anthropic’s Valuation Now Rivals OpenAI’s
With the latest funding round, Anthropic is hailed as one of the largest AI startups in the world, rivalling ChatGPT maker OpenAI. The latter is valued at over $300 billion in its ongoing funding round. Anthropic is known for its Claude family of generative AI models, which are largely targeted at enterprise customers for enhancing their sales, marketing, and customer relation functions.
Amazon agreed to invest another $4 billion in Anthropic in November 2024, brining its total investment to $8 billion so far. The E-commerce giant’s AWS (Amazon Web Service) is the exclusive cloud service provider for Claude models. Anthropic also leverages AWS’ Trainium chips to train its large language models (LLMs). Amazon has also integrated Claude in its Alexa voice devices, including its recent launch of Alexa+. Notably, Google parent Alphabet (GOOGL) also invested $1 billion in Anthropic in January this year.
Is Amazon a Buy, Hold, or Sell Stock?
Wall Street remains highly optimistic about Amazon’s stock trajectory. On TipRanks, AMZN stock commands a Strong Buy consensus rating based on 47 Buys and one Hold rating. Also, the average Amazon.com price target of $268.91 implies 31.2% upside potential from current levels. In the past year, AMZN stock has gained 15.5%.
