The A.I. startup Anthropic has embarked on a wild, improbable ride and scooped up $7.3 billion in funding over the past year, starting with an initial $450 million from investors at the end of May last year, including Google and Salesforce. But that was just for starters.
In August, by the time Anthropic had closed on a series of lightning-fast investment rounds – including another $4 billion from Amazon, a staggering $2 billion from Google, and a $750 million investment from the ultra-competitive Silicon Valley venture capital firm Menlo Ventures – well, by then it was time to retire from women’s chess.
What’s interesting isn’t just the numbers but the novel structures of the deals. Anthropic’s contracts often include technology licenses from its investors, recycling some of the money into their pockets. Finally, to make things easier and give even smaller investors a chance, a legal vehicle called a ‘special purpose vehicle’ through Menlo Ventures was created.
As Amazon Web Services VP Dave Brown has learned, they aren’t easy to parse. Still, Anthropic’s fundraising frenzy epitomizes the big shakeup in A.I. Generally, startups raise money yearly, showing progress. Now, with generative A.I. – meaning A.I. capable of synthesizing text, images, and more – the playbook is out of the window, and it’s all about how to get in on the action.
Anthropic, a San Francisco startup whose suite of A.I. offerings includes a popular chatbot called Claude, is a prime example. Its valuation quadrupled in January to $15 billion; its revenue, which was around $8 million a month then, is expected to jump eightfold this year. And it’s not alone. The A.I. startups OpenAI and others are also riding the gold rush, with valuations in the billions.
Yet with success come extra eyes: tech giants’ pursuit of startups in A.I. is drawing regulatory scrutiny for potential antitrust violations. Nonetheless, it’s all full steam ahead for Anthropic.
With its odd form of funding and its grandiose vision, Anthropic captures the insanity of modern A.I. entrepreneurship. The more the start-up reshapes the ground rules, the more investors seem willing to get in front of its bus.
Source: Erin Griffith and Cade Metz,The New York Times February 20, 2024
