SK Telecom Invests $100 Million in Anthropic

South Korea’s SK Telecom (SKT; NYSE: SKM) is investing $100 million in artificial intelligence (AI) startup Anthropic as part of a major effort to create large language models (LLM) for use in telecom applications.

SKT isn’t saying how much it’s already invested in Anthropic, but the telco said it contributed to the startup’s $450 million C round back in May 2023, though it wasn’t specified as an investor at that time. That round was led by Spark Capital with participation from Google, Salesforce Ventures, Sound Ventures, and Zoom Ventures, among others. In July, enterprise resource planning software giant SAP also invested an unspecified amount in Anthropic.

Prior to these investments, Google sunk nearly $400 million into Anthropic and has taken a 10% stake in the company. And Anthropic has reportedly declared Google Cloud to be its platform of choice for LLM development.

This investment further cements the position of Anthropic, founded in 2021, as one of a handful of startups that are attracting large investments from powerful technology companies. Others in this category include OpenAI, on which Microsoft (Nasdaq: MSFT) has spent over $10 billion; and Cohere, which has garnered hundreds of millions in investments from SAP as well as Salesforce Ventures.

Notably, the adoption of Anthropic’s Claude for telecom and Cohere for business applications indicates that large tech firms and carriers are intent on developing industry-specific LLMs, and they're turning to innovative startups for help.

A Broader Vision

SKT plans to adapt Anthropic’s Claude model and work with the startup’s co-founder and chief science officer Jared Kaplan to create a new telecom-oriented LLM that supports multiple languages, including Korean, English, German, Japanese, Arabic, and Spanish. The model will focus on customer service, marketing, sales, and interactive consumer applications specific to the telecom industry, SKT said.

Once developed, SKT will give the LLM to the Global Telco AI Alliance, an industry group formed last month by SKT, Deutsche Telekom, e&, and Singtel to create a Telco AI Platform that, in the words of the SKT release, “is expected to serve as the core foundation for new AI services, including those designed to improve the existing telco services, digital assistants, and super apps that offer a wide range of services.”

The alliance’s Telco AI Platform will be shaped in part by a joint working group that will discuss the generative AI needs of telcos and attempt to reach consensus via a committee of C-suite representatives from each telco. The adoption of SKT’s Anthropic model appears to be part of that effort.

Bringing AI to Telcos

Interestingly, the alliance is aimed at “bridging the gap between Europe and Asia,” and a North American telco didn’t appear to be part of the scheme initially, though Deutsche Telekom is the parent company of T-Mobile (Nasdaq: TMUS). The omission of U.S. telcos from the founding of the alliance seems to be part of a a seeming lack of generative AI activity among the American carriers.

Meanwhile, the alliance participants seem to have been working on AI for a while. Singtel co-founded the Singtel Cognitive and Artificial Intelligence Lab for Enterprises at Nanyang Technological University in Singapore in 2017. And since at least 2018, Deutsche Telekom has claimed to use AI for a range of applications, including customer service and network planning. At one point, DT said it would opt to develop its own AI rather than rely on an outside firm. That, apparently, has changed.

Futuriom Take: SKT’s investment in Anthropic highlights demand for AI applications tailored to specific industries. SKT and its EMEA partners are taking a leading role in generative AI for telcos.