Amazon has invested another $4bn in AI start-up Anthropic to challenge Nvidia's GPU dominance in the AI chip market.
The deal will see Anthropic use AWS as its primary cloud and training partner while helping Amazon develop its Trainium chip design.
However, the challenge will be getting Anthropic to switch away from Nvidia GPUs and use Trainium chips to train and run large language models.
Anthropic CEO Dario Amodei stated they use Nvidia, as well as custom chips from both Amazon and Google with each having varying trade-offs.
Amazon's first investment in Anthropic in 2023 had similar conditions, but it remains unclear if Anthropic followed through on its promise to use Amazon's Trainium and Inferentia chips.
Amazon wants its AI chips to be used more to train and run large language models by challenging Nvidia's GPU dominance.
Anthropic will collaborate with Amazon's AWS Neuron AI model development platform and Trainium chip design.
Nvidia's stock dropped more than 3% following the Amazon-Anthropic news as it competes with Amazon's chips.
Anthropic could be more committed to using Amazon's Trainium chips after receiving its latest investment of $4bn.
Amazon's cloud rival Google is also building its custom AI chips, which compete with Nvidia's GPUs.