A modern loyalty that is likely to be rewarded

Amidst all the innovative advancements happening right now, it’s clear that companies need to work quickly to stay at the forefront of their industries, using what’s possible in the implementation of artificial intelligence.

One thing that is happening, to a large extent, is corporate loyalty.

We have companies that dominate in their verticals, but they often don’t have that full stack in-house. They collaborate with others to stay ahead of the curve in whatever they offer to enterprise or consumer customers.

Now, for example, Amazon is doubling down on its partnership with AI startup Anthropic to enable AWS customers to use services based on Anthropic’s new models.

After a $4 billion investment in September last year, Amazon is now announcing a second round at the same price.

What does this mean?

It means Amazon Web Services, Amazon’s managed web services division, will integrate Anthropic products and capabilities into its platforms.

AWS in the cloud era

During the era of cloud and virtualization, Amazon Web Services became a household name, and to a large extent, a dominant name in the cloud industry. It provides object storage, server capacity and more on virtualization and distributed infrastructure premises. There are many plug and play options for companies. So in the rush to go cloud, AWS mushroomed.

Here’s a pro talking about what was the norm in the days before virtualization:

“In the pre-virtualization era, infrastructure deployment was manual. The infrastructure took months to provision, assemble, assemble, connect, install and configure,” writes Stephen Orban for the AWS Cloud Enterprise Strategy Blog. “Most applications were monolithic, with tight interdependencies and manual deployment. Installation and configuration guides are usually tens, if not hundreds, of pages long. Data center efficiency was also a challenge. With such long provisioning cycles, businesses would often provision 25-40% more than needed during peak usage. With so much wasted capacity, utilization rates were often less than 10%. In this model, development, infrastructure and operations teams operated all in silos, requiring weeks or months of planning for each change. The operations themselves became a huge challenge as everything was managed and operated manually, with little standardization across environments.”

Then everything changed.

As the cloud took over, all of a sudden, companies could simply outsource all of their data center needs. They can place workloads and datasets in the cloud and access them as needed. They can receive elastic service levels on demand for scaling or dynamic usage.

And so they did, in a crowd. AWS grew quickly, gaining a host of enterprise customers, leading to continued success. Here’s this from Statista:

“AWS generated over US$90 billion in net sales revenue, forming a significant portion of Amazon’s total net sales by 2023.”

So now, with AI, all these clients can seamlessly access Anthropic models, like Claude, who is learning to use a computer like a human being and perform agentic tasks like an AI entity.

If you think about it, this partnership makes a lot of sense and is likely to be a model for other companies. In other words, a cloud service provider works with a particular AI company to use its models to bring AI capability to customers.

There is also a lot of potential in announcing these partnerships. It increases the recognition and reputation of companies in the technology world.

A giant in technology and beyond

However, it is interesting to note that Amazon did not start from an inconspicuous place. Apart from dominating cloud services, the same company name is also synonymous with package delivery, obviously. Its founder is worth many billions of dollars as the company boasts not one but two monolithic divisions.

But whether your company is the biggest around or a tiny SMB, the principle remains the same – startups like Anthropic and big names like OpenAI are bringing the power of their models to the enterprise world. This will shape the way the business world evolves quickly as we understand what big language models and neural networks can do. Let’s count just a few of the new skills they have acquired in just a few years:

· Reasoning and giving chains of thought, explaining multi-step processes

· Generation of all types of high quality graphics and text

· Work on high-level tasks independently with minimal human supervision

· Compilation and processing of massive data sets to develop targeted recommendations for specific use cases

This is just the beginning, but you can see how transformative this will all be, and first movers like Amazon will benefit immensely.