Sherwood News

Amazon is spending billions to make sure it doesn’t fall behind in AI

The company’s $75 billion capital splurge shows no signs of slowing in 2025.

11/25/24 10:29AM

With Microsoft tightly intertwined with OpenAI, and Apple, Google, and Meta stuffing their own versions of AI into pretty much all their products, Big Tech is hard at work capturing as much value — or garnering as much hype — from AI as possible. Amazon’s latest move is a $4 billion bet on Anthropic, announcing the investment in the AI startup on Friday, doubling its total stake in OpenAI’s largest rival to $8 billion. (See here for a great explainer of the web of investments in AI companies.)

Amazon’s deal will see Anthropic use AWS chips for its foundational models, and it follows Anthropic’s June release of the latest version of its AI assistant, Claude. The company says Claude outperforms OpenAI’s GPT-4o and Google’s Gemini 1.5 Pro across a range of tasks: writing, coding, solving math problems, interpreting charts, transcribing text from images, and, apparently, understanding humor.

Of capital importance

The investment is a continuation of Amazon’s (and the rest of Big Tech’s) new strategy: spend billions of dollars to make sure you don’t fall behind in AI. That doesn’t just mean passive investments in startups. Indeed, for years, Big Tech was the epitome of the capital-light business model, driving profits from intangible assets like software. Now, the tech giants are pouring billions into physical stuff, including massive data centers and custom chips.

The four tech giants — Amazon, Microsoft, Meta, and Alphabet — spent nearly a combined $60 billion on capital investments in Q3, up 59% from last year. By the end of 2024, this figure is expected to surpass a total of $200 billion, with Amazon leading at $75 billion — most of which supports AWS and its AI business. AWS, while accounting for just 16% of Amazon’s revenue in 2023, generated two-thirds of the company’s operating profit.

Amazon’s spending spree shows no signs of slowing, with the company expecting to splurge even more in 2025. In the latest earnings call, CEO Andy Jassy called the company’s relentless spending a “once-in-a-lifetime type of opportunity.”

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While gaming industry groups may not like it, there’s been a huge change in the methods people are using to put money on the big games, with everyone from fortunate NYC bar owners, to a far less fortunate Spanish supporter, turning to prediction markets to try and turn their sports know-how into cold, hard cash.

According to a new report from Adam Blacker for apptopia, that shift might have been even more seismic than imagined in the wake of the NBA and NHL finals and around the 2026 World Cup kicking off.

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Anthropic pulls Fable and Mythos access worldwide after Trump administration bars their use by foreign nationals

Only days after releasing two versions of its next-gen AI model, Anthropic has disabled them for users worldwide.

Anthropic says it received a Friday night order from the Trump administration to suspend access to the models for any foreign national (anywhere in the world) — a group that included some Anthropic employees. In response, the company turned off access to everyone.

Last week, the company released to the public its much-anticipated Claude Fable 5 model (and its restricted version Claude Mythos 5, which is still being tested with trusted partners). Anthropic said in a blog post announcing the action that officials cited national security concerns with the new models, while offering few specific details.

The post said that the government gave the company “verbal evidence of a potential narrow, non-universal jailbreak” of the public Fable 5 model. A jailbreak is a means by which users can evade restrictions built into the code to unlock prohibited functionality. Anthropic downplayed the significance of the attack, and said other major models, such as OpenAI’s GPT-5.5, could also be affected by the technique described.

Fears of these first Mythos-class models being misused are running high, after Anthropic warned the cybersecurity world in May that the advanced cyber capabilities of Mythos have rapidly discovered thousands of vulnerabilities in ubiquitous software, leading to the decision to restrict the full version of the model to a close group of trusted partners for testing.

This morning, Axios reported that Anthropic technical staff have flown to Washington to meet with White House officials to resolve the issue.

The Wall Street Journal is reporting that the Trump administration’s decision to take action against Anthropic was prompted by discussions that Amazon CEO Andy Jassy had with officials, including Treasury Secretary Scott Bessent. According to the report, Amazon researchers said they had been able to evade some of Fable 5’s security restrictions using specific prompts. Amazon is a major investor in Anthropic.

Anthropic is currently suing the US government to fight the Pentagon’s blacklisting of the company on national security grounds.

Statement on the US government directive to suspend access to Fable 5 and Mythos 5