Amazon Cuts Anthropic Models Amid Rising Costs
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Amazon Reduces Anthropic Models Amid Rising Costs
Engineers at Amazon are reportedly distilling Anthropic's models to cut costs ahead of the implementation of a new pricing structure based on tokens. This is according to a report from The Information. Distillation involves training a smaller model using the outputs of a larger model. Amazon holds certain rights to use Anthropic's models for this purpose, according to a source close to the matter, similar to Apple's agreement with Google Gemini.
Amazon offers a distillation service on its cloud platform Bedrock, but Anthropic's Claude models are not available on this platform; only Amazon's Nova models and Meta's Llama models are supported.
The initiative is linked to a renegotiation of the partnership, according to The Information. Starting next year, Amazon will pay for Anthropic's models based on the tokens processed rather than compute hours, which could lead to a significant increase in costs. An Amazon spokesperson disputed this claim, stating that changes related to the expansion of the partnership will not raise costs. Anthropic emphasizes lower prices relative to the performance its models provide.
Amazon is also exploring alternatives such as OpenAI and its own Nova models. The company has invested up to $25 billion more in Anthropic and up to $50 billion in OpenAI this year.
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