Wealthy sovereign wealth funds are amongst investors clamoring for a stake in Anthropic, the red-hot artificial intelligence startup taking up OpenAI. One country was unnoticed: Saudi Arabia.
As bankers form a group of potential new sponsors for Anthropic, based on people accustomed to the matter, the corporate has ruled out accepting money from the Saudis. As one source told CNBC, Anthropic executives cited national security.
The shares in Anthropic are on the market because they’re owned by FTX, the failed cryptocurrency exchange founded by Sam Bankman-Fried, and are being offloaded as part of the corporate’s bankruptcy proceedings. FTX bought the stock three years ago for $500 million. Thanks to the recent AI boom, an 8% stake is now value over $1 billion.
Proceeds from the sale will probably be used to repay FTX customers. The deal is ongoing and on target to be finalized in the following few weeks, based on individuals with knowledge of the talks who asked to not be identified because of the private nature of the negotiations.
Sources said the non-voting Class B shares are being sold at Anthropic’s latest valuation of $18.4 billion. Over the past few years, Anthropic has raised roughly $7 billion from tech giants resembling , and . Its large language model competes with OpenAI’s ChatGPT.
According to sources, Anthropic founders Dario and Daniela Amodei have the best to challenge any potential investor. However, they aren’t involved in the present fundraising process or in discussions with potential investors regarding FTX shares. The founders were introduced to Bankman-Fried through “effective altruism”, the philosophy of making as much money as possible and giving it away.
Saudi Crown Prince and Prime Minister Mohammed bin Salman meets with U.S. Secretary of State Antony Blinken (not pictured), in Jeddah, Saudi Arabia, March 20, 2024.
Evelyn Hockstein | Reuters
While Anthropic’s founders have told bankers they will not accept money from Saudi Arabia, they do not plan to challenge financing from other sovereign wealth funds, including the United Arab Emirates’ Mubadala fund. According to 1 source, the UAE-based company is actively considering investments.
The potential buyers of FTX shares are a consortium of new Anthropic investors, the source said, meaning Amazon and Alphabet won’t be involved. Some of FTX’s shares are purchased through special purpose vehicles (SPVs), which permit multiple investors to pool capital. Three sources said the special purpose vehicles are emailing enterprise capital firms asking for participation. 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) didn’t immediately reply to a request for comment.
PIF, Saudi Arabia’s sovereign wealth fund, has assets of greater than $900 billion and is investing capital in technology to diversify the country’s revenues away from oil. The fund is in talks with enterprise capital firm Andreessen Horowitz to create a $40 billion fund for artificial intelligence investments, two sources with knowledge of the matter told CNBC. The New York Times first reported the discussions.
Saudi Crown Prince Mohammed bin Salman’s ambitious Vision 2030 initiative goals to modernize the economy and strengthen links in global finance. MTP invests in corporations resembling , also financing the LIV golf league and allocating significant funds to skilled football and tennis.
Anthropic’s concerns about Saudi Arabia’s national security may involve dual-use technologies – software or technology that may be used for each civilian and military applications. This is an area of particular concern to the Committee on Foreign Investment within the United States (CFIUS), which may block foreign investment from certain sources in certain areas. Saudi Arabia can also be reaching out to China.
The human rights situation in the dominion stays a serious concern for some Western partners. The most notable case lately was the alleged murder of Washington Post journalist Jamal Khashoggi in 2018 – an event that sparked international response within the business community.
In November, Bankman-Fried was convicted of seven criminal charges related to the collapse of FTX. The verdict within the case will probably be handed down next week, and prosecutors are recommending a sentence of 40 to 50 years.
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