Amazon seeks cheaper AI alternatives as Anthropic shifts to token-based pricing next year

Anthropic Fires Back at Snitch Amazon CEO

Snitches may not get stitches, but they do get squeezed by higher rates. The tensions are high between Amazon and Anthropic, and they don't appear to be easing any time soon. According to a new report from The Information, a contract between the companies that was renegotiated earlier this year will require Amazon to pay Anthropic based on token usage, leading to much higher bills for Amazon, and the online retail giant is looking for alternatives to Claude. The new token-based pricing structure that Amazon will reportedly face does not kick in until next year, but its mere presence on the horizon could threaten a wide range of Amazon's internal tools, given how heavily the company has leaned on Anthropic's models. According to The Information, Amazon's coding agent Kiro and workplace assistant Quick both rely on Claude. So does its consumer-facing Alexa for Shopping tool. There is an obvious irony in Amazon reportedly bristling at token-based pricing after previously posting an internal leaderboard that encouraged employees to burn through as many tokens as possible. But the dispute may also point to a deeper rift in Amazon's relationship with Anthropic. That's because the search for cheaper AI offerings has sent Amazon poking around a potential arrangement with Anthropic's biggest rival, OpenAI. A deal between Amazon and OpenAI would move them even closer, and they have been getting mighty cozy lately. Earlier this year, the company committed $50 billion to the AI lab, with Amazon lending the company access to its infrastructure and OpenAI providing access to its models in return. The closeness between OpenAI and Amazon comes as the e-commerce juggernaut has been growing apart from Anthropic, its first love. At the start of the AI "revolution," Amazon put $4 billion into Anthropic's coffers as OpenAI was in bed with Microsoft. And while the two have renewed their relationship multiple times, things have not been great between the companies lately. For one, Anthropic has gotten big enough to draw unwanted attention, and it has started doing business with Amazon rivals, including a reportedly massive deal with Google for cloud services. But things really seemed to boil over last month when Anthropic released its Fable 5 AI model, the supposedly safe version of its "too powerful to release" Mythos model, only to have it clipped by the federal government after a report suggested it could go rogue. That report came from Amazon, and happened to come as the company is reportedly ramping up to release its own cybersecurity-focused AI agent designed to spot vulnerabilities -- the exact thing that Fable 5 is supposedly so good at.

Amazon seeks cheaper AI alternatives as Anthropic shifts to token-based pricing

Amazon is looking at OpenAI and other alternatives after a renegotiated contract will shift Anthropic billing to per-token pricing next year. Amazon is looking for cheaper alternatives to Anthropic's Claude models after a renegotiated contract will shift to token-based pricing that could substantially increase the company's AI costs, according to The Information. The new pricing structure does not take effect until next year, but Amazon is already exploring options including OpenAI. The report highlights a deepening rift between two companies that were once inseparable partners in the AI race. Amazon's dependence on Claude runs deep. Its coding agent Kiro, workplace assistant Quick, and consumer-facing Alexa for Shopping all rely on Anthropic's models, according to The Information. A shift to token-based billing would make that dependence far more expensive, particularly after Amazon recently scrapped an internal leaderboard that encouraged employees to burn through as many AI tokens as possible. The search for cheaper models has sent Amazon toward OpenAI, a company it has already been growing closer to. Earlier this year Amazon committed $50 billion to OpenAI, giving the AI lab access to its cloud infrastructure in exchange for access to its models. That deal followed Amazon's initial $4 billion investment in Anthropic, which has since grown to a potential $33 billion. Anthropic, meanwhile, has been expanding its own relationships beyond Amazon. The company committed to spending $200 billion on Google Cloud and chips over five years, according to The Information, a deal that effectively makes Google a major infrastructure partner alongside AWS. Amazon's latest $25 billion investment in Anthropic included a reciprocal commitment of more than $100 billion in AWS spending, but the Google arrangement signals Anthropic no longer depends on a single cloud provider. The tension boiled over last month when the US government ordered Anthropic to shut down its Fable 5 and Mythos 5 models after a security report that originated from Amazon. Andy Jassy reportedly told government officials that Amazon researchers had used Fable 5 to obtain information useful for cyberattacks. The timing raised questions, coming as Amazon was preparing to launch its own cybersecurity-focused AI agent designed to spot vulnerabilities. The contract dispute, the move toward OpenAI, and the Fable 5 incident together suggest the Amazon-Anthropic relationship has entered a new and more adversarial phase. Amazon remains one of Anthropic's largest investors and cloud customers, but both companies now have reasons to reduce their dependence on each other. For the broader AI industry, the fracturing of its most prominent investor-model-provider partnership would redraw the competitive map.