Big Tech Companies Were Investors in Smaller AI Labs. Now They’re Rivals

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Microsoft and Amazon, once merely investors in OpenAI and Anthropic, are now competing with the frontier labs by making their own models.

. While Google and Meta made developing their own AI models a top priority, Microsoft and Amazon have invested in smaller technology companies, in return receiving access to those companies’ AI models that they then incorporated into their products and services.access to the AI systems it develops, while Microsoft provides OpenAI with the computational power it needs.

But maintaining this lead will be “a constant struggle,” writes Nathan Benaich, founder and general partner at venture capital firm Air Street Capital, in an email to TIME. “Labs are in the challenging position of being in constant fundraising mode to pay for talent and hardware, while lacking a plan to translate this model release arms race into a sustainable long-term business.

But while the big technology companies may have certain advantages, the smaller companies have their own strengths, such as greater experience training the largest models, and the ability to attract the most talented researchers, says Thompson. While it could be argued that more companies entering the foundation model market would increase competition, it is more likely that the vertical integration will serve to increase the power of already powerful technology companies, argues Amba Kak, co-executive director of the AI Now Institute, a research institute that studies the social implications of artificial intelligence.

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