According to financial market research tool Pitchbook, in 2023 alone, investors spent a total of $29.1 billion on nearly 700 generative AI deals, up more than 260% in value from the previous year. A significant portion of strategic investments came from Big Tech corporations.

Last week, Amazon announced a further $2.75 billion investment in AI startup Anthropic, its highest-profile venture yet, and the latest example of the AI ​​craze that’s forcing major tech companies to open their wallets.

Anthropic is the developer behind the AI ​​model Claude, which competes with ChatGPT from Microsoft-backed OpenAI and Gemini from Google. Along with Meta and Apple, all the tech giants are racing to integrate generative AI into their product and feature portfolios to ensure they don’t fall behind in a market that is expected to reach $1 trillion in revenue over the next decade.

Meta Group — which is developing its own model called Llama — said it is spending billions of dollars on graphics processors from Nvidia — one of several companies that helped the chipmaker boost revenue last year by more than 250%.

Microsoft has been investing in generative AI for some time, investing $1 billion in OpenAI in 2019 and gradually scaling that investment to around $13 billion. Microsoft uses many of OpenAI’s models and offers open-source models on its Azure cloud.

Google’s parent company Alphabet is both an investor and a builder, focusing on integrating synthetic AI into search, documents, maps, and other features across its products, including the Gemini model. Last year, Google committed to investing $2 billion in Anthropic, after confirming a 10% stake in the startup along with a major cloud deal between the two.

Tech executives have recently emphasized a greater focus on generative AI. Microsoft CFO Amy Hood said last year that the company was retooling its workforce to prioritize AI. Executives at Google, Apple, and Amazon have also told investors about broad cost cuts across their divisions to redirect more funding to AI-related efforts.

Daniel Newman, CEO of technology analysis firm Futurum Group, warned that tech companies need to be more discerning when investing in AI, as regulators around the world tighten regulations on Big Tech, making it harder to make large-scale acquisitions, and even investments are attracting scrutiny.

In January, the US Federal Trade Commission (FTC) announced that it would launch a sweeping investigation into the largest companies in the AI ​​field, including Amazon, Alphabet, Microsoft, Anthropic, and OpenAI. Through this, the FTC has the authority to request specific reports on their business practices.