It’s no longer just about OpenAI or ChatGPT.
We now have the the rise of powerful rivals in the large language model (LLM) scene. Some of the most capable LLMs are backed by massive technology sector heavyweights. Anthropic AI and its Claude model have been a hot place in which companies want to invest.
And though retail investors can’t bet on the firm through public markets yet, the firms that have taken a stake are worth a look. This is especially true if they decide to embed some Claude AI features into their applications, similar to what Microsoft (NASDAQ:MSFT) has done with ChatGPT.
Now that Microsoft has such a big stake in OpenAI, all eyes are on the next best invention within the private markets. For now, it seems to be Anthropic, a relatively small AI firm behind Claude that was founded by siblings Dario and Daniela Amodei.
Let’s explore three mega-cap Anthropic investors that are becoming difficult to ignore. They are gearing up to power forward with their AI strategies to meet (and perhaps exceed down the line) that of Microsoft.
Amazon (AMZN)
Recently, Amazon (NASDAQ:AMZN) increased its stake in the company by $2.75 billion back in March 2024, bringing its total stake to $4 billion.
With its robust Bedrock AI service and the recently revealed Amazon Q AI-powered assistant, Amazon stands out as one of the more magnificent AI plays of the Magnificent Seven right now. When it comes to Amazon Web Services (AWS), the company wants to allocate a massive 80% chunk of its Global Summit event to be all about generative AI. Amazon isn’t simply content with catching up on AI. It wants to pull full steam ahead.
However, at 52.1x trailing price-to-earnings, AMZN stock will not come cheap, as it plans to invest heavily in the future of AI.
Salesforce (CRM)
Salesforce (NYSE:CRM) has a relatively small stake in Anthropic through its Generative AI fund. At this juncture, it’s the amount of the stake is unclear. However, the fact that it’s an early investor is notable.
The stake represents a portion of the $500 million being set aside for investment in “responsible generative AI” companies. Other holdings within the AI fund include Canada’s Cohere and Hearth.AI. Indeed, it’s a fund full of disruptive potential.
Apart from the fund, which I think Salesforce should increase the budget for (again), Salesforce has also been organically innovating on AI. With AI Copilot for Sales, Einstein Copilot, and Slack AI, Salesforce is a serious frontrunner.
After pulling back around 14% from its recent high, investors may be able to snag CRM stock at a discount relative to its growth.
Alphabet (GOOG, GOOGL)
Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) is another established mega-cap tech titan that’s hopped aboard the Anthropic AI bandwagon. Reportedly, the firm has a $2.55 billion stake in the Claude-owner after its latest $2 billion investment. Indeed, Google seems to be clashing with Amazon for a larger piece of the red-hot private AI innovator.
Like Amazon, Alphabet has its own AI innovations and language models. With Gemini, Google already has one of the more popular models. As it integrates it with its suite of applications, chances are that Gemini could be the AI model to beat.
Therefore, Google’s Anthropic bet seems to be a smart way to grab a bigger slice of the LLM market. Indeed, Gemini and Claude are rivals that can both excel as the AI boom heats up. Also, if Gemini falls flat and Claude thrives, Google’s Claude bet can act as a hedge. Either way, Alphabet stock looks way too cheap, given its impressive one-two combo.
On the date of publication, Joey Frenette held shares of Alphabet (Class C), Amazon, Microsoft, and Salesforce. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.