Investing.com-- Google (NASDAQ:GOOGL) has invested an additional $1 billion into Anthropic, a leading AI start-up and OpenAI's rival, the Financial Times reported on Wednesday citing sources familiar with the matter.
The move strengthens Alphabet-owned (NASDAQ:GOOG) Google's position in the AI race as it continues to challenge competitors like Microsoft Corporation (NASDAQ:MSFT), Amazon.com Inc (NASDAQ:AMZN), and Meta Platforms Inc (NASDAQ:META), the report stated.
This new investment builds on the $2 billion Google had already committed to Anthropic, which is best known for its Claude family of AI models.
The investment is part of Google's broader effort to diversify its artificial intelligence business and capitalize on its early role in developing AI technologies. Despite pioneering the foundational technology for models like Claude and OpenAI's GPT-4, Google has faced challenges in commercializing these advancements, the FT report stated.
Anthropic, founded in 2021 by former OpenAI employees, has focused on AI safety and has introduced innovative features, including AI agents capable of performing complex tasks on behalf of users.
The company is also close to securing an additional $2 billion in funding from venture capital firms led by Lightspeed (TSX:LSPD) Venture Partners, which would value it at approximately $60 billion, the report said.
This comes amid fierce competition in the AI space, where Anthropic faces rivals such as OpenAI, Elon Musk's xAI, and Big Tech players like Amazon and Microsoft. Amazon has invested $8 billion in Anthropic over the past 18 months, its largest-ever venture investment, and plans to integrate Anthropic's models into its Alexa devices, according to the FT report.
Anthropic’s annualized revenue reached $1 billion in December 2024, growing tenfold over the past year, the Financial Times reported citing sources. However, profitability remains elusive due to the high costs of developing advanced AI models, with investors banking on the technology’s potential to generate trillions in value, it added.