Amazon is undertaking its most substantial external investment in its thirty-year history to enhance its position in the artificial intelligence competition.

The company announced it will allocate an additional $2.75 billion to support Anthropic, a San Francisco startup recognized as a leading player in generative artificial intelligence. Anthropic’s foundation model and chatbot Claude are contenders against OpenAI and ChatGPT.

The firms disclosed an initial investment of $1.25 billion in September, with Amazon indicating a potential total investment of up to $4 billion. This announcement represents the second portion of that funding. Amazon will retain a minority share in Anthropic and won’t hold a seat on its board. The agreement was reached based on Anthropic’s previous valuation of $18.4 billion.

In the past year, Anthropic concluded five funding agreements totaling around $7.3 billion. Its product directly rivals OpenAI’s ChatGPT in both business and consumer sectors, founded by former research executives and staff from OpenAI.

The announcement of Amazon’s investment follows closely after Anthropic introduced Claude 3, its latest collection of AI models claimed to be its swiftest and most potent to date. According to the company, its most advanced new models surpassed OpenAI’s GPT-4 and Google’s Gemini Ultra in industry benchmark assessments, including undergraduate-level knowledge, graduate-level reasoning, and fundamental mathematics.

In a post by CNBC, Swami Sivasubramanian, vice president of data and AI at AWS cloud provider said, “Generative AI is poised to be the most transformational technology of our time, and we believe our strategic collaboration with Anthropic will further improve our customers’ experiences, and look forward to what’s next.”

Amazon’s action represents the most recent development in a surge of spending by cloud providers to maintain a lead in the AI competition. This also marks the second adjustment to Anthropic’s capital structure within a week. On the previous Friday, bankruptcy documents revealed that cryptocurrency exchange FTX had reached an agreement with a consortium of purchasers to sell off most of its shares in Anthropic, confirming an earlier report by CNBC.