A deep-pocketed sovereign wealth fund is among investors keen to take a stake in Anthropic, a hot artificial intelligence startup that rivals OpenAI. One country left behind is Saudi Arabia.
The company has ruled out receiving funds from Saudi Arabia as bankers list potential new donors, according to people familiar with the matter. Humanity leaders cited national security, one of the people told CNBC.
Anthropic’s shares are for sale as it belongs to FTX, the failed cryptocurrency exchange started by Sam Bankman Fried, which is being sold as part of the company’s bankruptcy proceedings. FTX bought the stake for $500 million three years ago. Thanks to the recent AI boom, the 8% stake is now worth more than $1 billion.
Proceeds from sales will be used to repay FTX customers. Negotiations are ongoing and expected to be completed in the coming weeks, said the people, who requested anonymity because the talks are private.
The non-voting Class B shares are being sold at Anthropic’s final valuation of $18.4 billion, according to people familiar with the matter. Anthropic has raised about $7 billion from tech giants like Amazon, Alphabet and Salesforce over the past few years. Its large language model competes with OpenAI’s ChatGPT.
Anthropic founders Dario Amodei and Daniela Amodei have the right to object to potential investors, the people said. However, they are not involved in the current funding process or discussions with potential investors for FTX stock. The founders came to know Bankman Fried through the philosophy of “effective altruism,” or making as much money as possible and giving it all away.
On March 20, 2024, Saudi Crown Prince and Prime Minister Mohammed bin Salman meets with US Secretary of State Antony Blinken (not pictured) in Jeddah, Saudi Arabia.
Evelyn HochsteinReuter
Anthropic’s founders told bankers they would not accept Saudi money, but said they would not object to funding from other sovereign wealth funds, including the United Arab Emirates fund Mubadala. The UAE-based company is actively considering investments, one of the people said.
Potential buyers for FTX stock will consist of Anthropic’s new investor syndicate, with Amazon and Alphabet not involved, the people said. Some of FTX’s shares are being bought up through special purpose vehicles (SPVs), which allow multiple investors to pool their capital. According to three people familiar with the matter, the SPV is sending e-mails to venture companies asking for their participation. Investment bank Perera Weinberg is handling the sale on behalf of FTX.
Representatives for Anthropic and Perera Weinberg declined to comment on the sale. Mubadala and Saudi Arabia’s Public Investment Fund (PIF) did not respond to requests for comment.
Saudi Arabia’s sovereign wealth fund, PIF, has more than $900 billion in assets and is pouring capital into technology to diversify the country’s revenue away from oil. The fund is in talks with venture firm Andreessen Horowitz to create a $40 billion fund to invest in AI, two people familiar with the matter told CNBC. The discussion was first reported by the New York Times.
Saudi Arabia’s Crown Prince Mohammed bin Salman’s ambitious Vision 2030 initiative aims to modernize the economy and strengthen global financial connectivity. In addition to investing in companies such as Uber, PIF funds the LIV Golf League and spends heavily on professional soccer and tennis.
Anthropic’s national security concerns regarding Saudi Arabia may revolve around dual-use technology, such as software and technology that can be used for both civilian and military purposes. This is an area of focus for the Committee on Foreign Investment in the United States (CFIUS), which can block foreign investment from certain sources in certain areas. Saudi Arabia is also friendly towards China.
The human rights situation in Saudi Arabia remains a major issue for some Western countries. The most notable case in recent years was the alleged murder of Washington Post reporter Jamal Khashoggi in 2018, which sparked an international backlash from the business community.
In November, Bankman Fried was found guilty of seven criminal charges related to the FTX collapse. His sentencing is scheduled for next week, with prosecutors recommending a sentence of 40 to 50 years in prison.
clock: Prosecutors recommend 40 to 50 years in prison for SBF
