How Holding On To Anthropic Stake May Benefit FTX In Bankruptcy

Many of the largest technology companies are looking for new ways to invest in artificial intelligence, which includes investments in their own products and research, as well as taking stakes in smaller AI companies.

On Monday, Amazon.com, Inc AMZN announced an investment in the privately held AI company Anthropic. Here’s a look at past investments in Anthropic and who benefits from today’s news.

What Happened: Amazon announced a new collaboration with Anthropic that will see the companies work together on the development of AI models and provide access to the tools to Amazon Web Services customers.

The e-commerce leader said it will invest up to $4 billion in Anthropic with a minority ownership position in the company.

“We have tremendous respect for Anthropic’s team and foundation models, and believe we can help improve many customer experiences, short and long-term, through our deeper collaboration,” Amazon CEO Andy Jassy said.

Amazon will invest an initial $1.25 billion in Anthropic with an option to increase its total investment to $4 billion, according to TechCrunch.

Anthropic plans to raise up to $5 billion over the next two years to help fund and launch its subscription plan for Claude 2, a chatbot and to build a “frontier model” called Claude-Next.

The private artificial intelligence company has raised around $2.7 billion and was valued at $5 billion earlier this year.

The valuation of the company based on Amazon’s investment is not known.

The large investment in Anthropic by Amazon follows one of the biggest financial news stories of 2023 with Microsoft Corp MSFT investing an additional $10 billion in ChatGPT parent company OpenAI in January.

Related Link: Elon Musk, Sam Altman, Grimes, Jensen Huang Are Among TIME Magazine's Top Artificial Intelligence Voices

Anthropic Investors: Founded in 2021 by former OpenAI employees, Anthropic has quickly become one of the most valuable private artificial intelligence companies and attracted some of the top investors.

The company has attracted investments from the likes of Alphabet Inc GOOG GOOGL, Salesforce Inc CRM, Zoom Video Communication ZM and SK Telecom Co Ltd SKM.

Alphabet invested around $300 million for a reported 10% stake in the company in June as part of a $450-million funding round.

One of the investors in Anthropic via his Sound Ventures firm is actor Ashton Kutcher. In a speech earlier this year, Kutcher highlighted the growth of artificial intelligence and how companies that don’t invest in the space could fall behind.

“We believe this is potentially the most significant technology we will experience since the advent of the internet,” Kutcher said of AI.

Sound Ventures, which is also an investor in OpenAI, raised money this year to invest in additional AI companies.

Another investor in Anthropic is Cathie Wood via the Ark Venture Fund. Wood has been a strong believer in the future value of companies using artificial intelligence. Anthropic, along with Replit and MosaicML are the three privately owned companies she recently highlighted in which the fund is invested. 

Another early investor in Anthropic was FTX, the bankrupt cryptocurrency platform co-founded by its former CEO Sam Bankman-Fried.

FTX Wins on Investment: Benzinga previously reported on an investment in Anthropic by FTX and Alameda. Anthropic raised $580 million in a Series B funding round that included FTX and Alameda.

According to Crunchbase, the Series B was led by Bankman-Fried. Other investors listed for the company include Caroline Ellison, the former CEO of Alameda, and Nishad Singh, the former director of engineering at FTX.

While it is unclear exactly what valuation FTX invested in Anthropic at, it was significantly lower than the $4-to-$5-billion valuation the AI company had earlier this year and likely even lower than the new valuation created by the Amazon investment.

As part of its bankruptcy filing, the $500-million stake in Anthropic was unveiled and became a highly sought-after asset in the bankruptcy proceedings of selling off items to help pay back debtors.

In June, FTX paused plans to sell its stake in Anthropic, valued at $500 million.

A few months later, there is a high possibility that FTX’s stake in Anthropic is worth more and likely even more in demand from a prominent investor.

The big news in the cryptocurrency space recently was FTX being allowed to sell the cryptocurrency it was holding, including Solana SOL/USD and Bitcoin BTC/USD. Total crypto assets of $3.4 billion could be sold off to help pay debtors and get the company past bankruptcy.

The company’s stake in Anthropic could be just as big of news, and holding the stake for an extra three months could have a huge benefit for the bankruptcy procedure for the cryptocurrency platform.

Benzinga's Take: With Amazon and Alphabet, two of the world’s biggest companies, now investors in Anthropic, expect FTX’s stake in the company to attract some major attention when it goes back on the sale block.

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