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Happy Friday! Today we talk about Amazon’s $2.75 billion investment in Anthropic. We also talk about it’s parallel efforts in rolling it’s own AI model called Olympus. To win big you have to risk big and this is Amazon’s attempt in catching up in the AI world, bust most importantly how AI will heavily impact every single function and feature on Amazon, e-commerce… watch this space.

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Amazon's New AI Model

Amazon has significantly escalated its investment in AI technology through a substantial financial commitment to Anthropic, an emerging competitor to OpenAI. This move, including an additional $2.75 billion investment, marks Amazon’s largest investment in another company. At the same time, it is investing in the development of its own AI model called Olympus which is supposedly designed to outperform Anthropic’s Claude models.

So let’s dissect the two.

The investment in Anthropic is strategic, leveraging Amazon Web Services (AWS) as a platform to host Anthropic's developments, thereby embedding Amazon deeper into the AI technology landscape. This relationship, however, is less about partnership and more about bolstering Amazon’s own technological arsenal to stay competitive with rivals like Microsoft and becoming, eventually, a leader in the AI industry.

At the same time, Amazon is racing against time to develop its own large language model, codenamed Olympus, with the ambitious goal of surpassing the performance of Anthropic's Claude by mid-2024. Led by SVP Rohit Prasad, Amazon's AGI team is training a massive model with hundreds of billions of parameters, as the company recognizes the critical importance of frontier LLMs in the rapidly advancing field of generative AI. The model, which is still under development, is expected to integrate across Amazon’s various branches and be available to other businesses through AWS.

What does this mean for ecommerce sellers?

Amazon's development of Olympus, could have far-reaching implications for the company's retail business. For one, it will be the default AI model to be used by anyone internally at Amazon (whether it’s one of your business reps or Seller Support).

By integrating Olympus into every aspect of its store, including the A9 search algorithm (that’s still speculation but given all the noise around Cosmo, this is very likely), Amazon aims to completely evolve the online shopping experience. Pay attention to the “hundreds of billions of parameters” that this AI has been trained on. Some of these would definitely be coming from the vast data resources Amazon has on its customers. And so that could have a profound impact on a lot of operational decisions Amazon takes in the coming months.

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