Chatbot Wars: Anthropic's $4.1B Entry Challenges OpenAI's Dominance

Generative artificial intelligence (AI) platforms are deemed to be the next big thing in tech, thanks to the viral success of OpenAI's ChatGPT. The AI platform crossed 100 million monthly active users in two months to become the fastest-growing consumer platform in history in January, but was subsequently dethroned by Meta Platforms Inc.'s latest microblogging platform Threads. Regardless, the area has been incredibly popular recently, with many of the latest unicorns being minted in the space. Retail investors have even begun investing in the space with companies like RAD AI raising millions from retail and accredited investors.

Battling For Supremacy

After ChatGPT's seemingly overnight success, tech titans, including Microsoft Corp. and Alphabet Inc.'s Google, have raced to release their version of generative AI to capitalize on this trend. While both platforms were launched shortly after ChatGPT blew up, they failed to garner similar hype created by OpenAI's AI. 

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Anthropic, a relatively lesser-known startup, is making significant investments to launch a competing AI platform. Only a few months after securing $750 million through two financing rounds, the startup is introducing its latest AI chatbot: Claude 2. Earlier in May, Anthropic raised $450 million, which came after a $300 million financing round in March, leading to a valuation of $4.1 billion for the company.

Established in 2021 by former executives from OpenAI and financially backed by prominent companies like Google, Salesforce Inc. and Zoom, Anthropic is now making its chatbot technology accessible to the general public with the release of Claude 2. Over the last two months, the company's AI models underwent testing by various businesses, including Slack, Notion and Quora. 

As a result, Anthropic has amassed a waitlist of over 350,000 people seeking access to Claude's application programming interface and its consumer-oriented features. Initially, Claude is slated to launch in the United States and the United Kingdom, with plans from Anthropic to broaden its reach in the following months. 

"We have been focused on businesses, on making Claude as robustly safe as possible," Anthropic Co-Founder Daniela Amodei said. "We really feel that this is the safest version of Claude that we've developed so far, and so we've been very excited to get it into the hands of a wider range of both businesses and individual consumers."

Claude AI: Revolutionizing Generative AI 

Amodei has devoted a minimum of two months to the development of Claude 2, involving a dedicated team of 30 to 35 people directly working on the AI model and another 150 employees providing support. 

Claude 2 can summarize the content of up to approximately 75,000 words, equivalent to the length of a book. In contrast, ChatGPT can handle approximately 3,000 words. In addition, users can input extensive data sets and request summaries in various formats. 

Amodei also presented concrete illustrations of Claude 2's advancements compared to its previous version. The updated version of the chatbot scored 76.5% on the bar exam's multiple-choice portion, demonstrating a 3.5 percentage point improvement from the previous score of 73%. Claude 2 also scored 71% in a Python coding test, showcasing progress from its prior iteration's score of 56%.

One major improvement of Anthropic over ChatGPT is its ability to give "harmless responses" with twice the efficacy compared to the latter. 

"It's a really unusual time from a business perspective because there's just so much demand for large language models and really more demand than the industry can currently provide," Amodei said. "The landscape is just very wide, and there's really quite a lot of room for many different users and types of users to make use of these systems."

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Challenges Ahead

Anthropic was among the four companies summoned to a White House meeting in May, where it engaged in discussions on responsible AI development with Vice President Kamala Harris. Other companies invited to the meeting were Alphabet, Microsoft Corp., and OpenAI. 

One significant concern is the issue of AI chatbots producing incorrect answers, often referred to as hallucinations by some tech companies, which remains an ongoing problem. In addition, prominent AI companies are joining forces to promote the need for AI regulations, highlighting the detrimental capabilities of generative artificial intelligence if its growth is left unchecked. 

"There are just so many remaining unknown unknowns but also known challenges with all language models in the world today," Amodei said. "No language model is 100% immune from hallucinations, and Claude 2 is the same."

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