Deep-pocketed sovereign wealth funds are among the investors vying for a share in Anthropic, a hot artificial intelligence firm competing with OpenAI. Saudi Arabia is one of the countries left out.
According to persons acquainted with the subject, as bankers gather a group of potential new Anthropic supporters, the company has decided not to accept money from Saudis. One of the sources told CNBC that anthropic executives cited national security concerns.
The share in Anthropic is for sale since it is owned by FTX, the failing cryptocurrency exchange founded by Sam Bankman-Fried, and is being sold as part of the company’s bankruptcy procedures. Three years ago, FTX purchased the shares for $500 million. The 8% investment is now worth more than $1 billion, thanks to the current AI growth.
The proceeds from the transaction will be utilized to repay FTX clients. The transaction is still ongoing and is expected to be completed within the next few weeks, according to sources familiar with the negotiations who asked not to be identified because the discussions are private.
The class B shares, which do not have voting rights, are being sold at Anthropic’s most recent valuation of $18.4 billion, according to sources. Anthropic has received approximately $7 billion in recent years from digital titans such as Amazon, Alphabet, and Salesforce. Its huge language model rivals OpenAI’s ChatGPT.
Dario and Daniela Amodei, the creators of Anthropic, have the right to question any possible investors, according to sources. They are not, however, participating in the present fundraising effort or in conversations with possible investors over FTX’s investment. The founders were introduced to Bankman-Fried through “effective altruism,” a theory that entails making as much money as possible and then giving it away.
While Anthropic’s founders have warned bankers that they will not accept Saudi money, they do not intend to oppose funding from other sovereign wealth funds, like the United Arab Emirates’ Mubadala. According to one of the sources, the UAE-based firm is actively seeking investment.
According to a source, the potential owners of FTX shares are a syndicate of new Anthropic investors, implying that Amazon and Alphabet will not be engaged. A portion of FTX’s shareholding is being traded around via special purpose vehicles, or SPVs, which allow various investors to pool cash. Three sources reported that SPVs have been emailing venture firms to solicit involvement. Perella Weinberg is arranging the deal for FTX.
Anthropic and Perella Weinberg declined to comment on the transaction. Mubadala and Saudi Arabia’s Public Investment Fund (PIF) did not immediately reply to a request for comment.
The PIF, Saudi Arabia’s sovereign wealth fund, has more than $900 billion in assets and has been investing in technology to diversify the country’s earnings away from oil. According to two persons familiar with the situation, the fund is in negotiations with venture firm Andreessen Horowitz about forming a $40 billion fund to invest in AI. The New York Times initially reported on the negotiations.
Saudi Crown Prince Mohammed bin Salman’s ambitious “Vision 2030 Initiative” aimed to modernize the economy and establish links with global finance. The PIF invests in Uber, the LIV golf league, professional soccer, and tennis.
Anthropic’s national security concerns about Saudi Arabia could stem from dual-use technology — software or technology that can be utilized for both civilian and military purposes. That is a key area of concern for the Committee on Foreign Investment in the United States (CFIUS), which has the authority to block foreign investments from specific sources in certain areas. Saudi Arabia has also warmed up to China.
Some Western allies continue to have serious concerns about the kingdom’s human rights record. The most significant occurrence in recent years was the alleged murder of Washington Post journalist Jamal Khashoggi in 2018, which sparked global outrage in the business sector.
Bankman-Fried was found guilty of seven felony offenses related to the FTX collapse in November. His sentencing is slated for next week, with prosecutors recommending a sentence of 40 to 50 years.
Anthropic is lining up a new slate of investors, but the AI startup has ruled out Saudi Arabia
