Deep-pocketed sovereign wealth funds are among the investors seeking a stake in Anthropic, the red-hot artificial intelligence startup that’s taking on OpenAI. One country that is left out: Saudi Arabia.
As bankers line up a group of potential new Anthropic backers, the company has ruled out taking money from the Saudis, according to people familiar with the matter. Anthropic executives cited national security, one of the sources told CNBC.
The Anthropic stake is for sale as it is owned by FTX, the failed cryptocurrency exchange founded by Sam Bankman-Fried, and is being sold as part of the company’s bankruptcy proceedings. FTX bought the shares three years ago for $500 million. Due to the recent AI boom, the 8% stake is now worth more than $1 billion.
The proceeds from the sale will be used to reimburse FTX customers. The transaction is ongoing and is expected to close in the next few weeks, said people with knowledge of the talks, who did not want to be identified because the negotiations are private.
The Class B shares, which do not carry voting rights, will be sold at Anthropic’s latest valuation of $18.4 billion, according to sources. Anthropic has raised around $7 billion in recent years from tech giants like… Amazon, alphabet And Foreclosure. Its large language model competes with OpenAI’s ChatGPT.
According to the sources, Anthropic founders Dario and Daniela Amodei have the right to challenge potential investors. However, they are neither involved in the current fundraising process nor in discussions with potential investors for FTX participation. The founders met Bankman-Fried through “effective altruism,” a philosophy that involves making as much money as possible in order to give it all away.
Saudi Crown Prince and Prime Minister Mohammed bin Salman meets U.S. Secretary of State Antony Blinken (not pictured) in Jeddah, Saudi Arabia, March 20, 2024.
Evelyn Hockstein | Reuters
While Anthropic’s founders told bankers they would not accept money from Saudi Arabia, they do not plan to challenge funding from other sovereign wealth funds, including the United Arab Emirates’ Mubadala fund. According to one of the sources, the UAE-based company is actively exploring investments.
The potential buyers of FTX shares are a consortium of new investors for Anthropic, a source said, meaning Amazon and Alphabet would not be involved. A portion of FTX shares are traded through special purpose vehicles (SPVs), which allow multiple investors to pool capital. According to three sources, SPVs have sent emails to venture firms asking them to invest. The investment bank Perella Weinberg is handling the sale on behalf of FTX.
Representatives for Anthropic and Perella Weinberg declined to comment on the sale. Mubadala and Saudi Arabia’s Public Investment Fund (PIF) did not immediately respond to a request for comment.
The PIF, Saudi Arabia’s sovereign wealth fund, has more than $900 billion in assets and is investing capital in technology to diversify the country’s revenue away from oil. The fund is in talks with venture firm Andreessen Horowitz about setting up a $40 billion fund to invest in AI, two sources familiar with the matter told CNBC. The New York Times first reported on the discussions.
Saudi Crown Prince Mohammed bin Salman’s ambitious Vision 2030 initiative aims to modernize the economy and strengthen ties in global finance. The PIF invests in companies including AboveAt the same time, he also financed the LIV golf league and spent a lot of money on professional football and tennis.
Anthropic’s national security concerns regarding Saudi Arabia may relate to dual-use technology – software or technology that can be used for both civilian and military applications. This is a particular focus of the Committee on Foreign Investment in the United States (CFIUS), which can block foreign investment from certain sources in certain areas. Saudi Arabia has also warmed to China.
The kingdom’s human rights record remains a major concern for some Western partners. The most notable case in recent years was the alleged murder of Washington Post journalist Jamal Khashoggi in 2018, an event that sparked international backlash in the business world.
In November, Bankman-Fried was convicted of seven felonies related to the FTX collapse. His sentencing is scheduled for next week, and prosecutors are recommending a sentence of 40 to 50 years.
REGARD: Prosecutors recommend a prison sentence of 40 to 50 years for SBF
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2024-03-22 20:05:39
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