Looks like the entire Silicon Valley is head over heels for Anthropic. According to recent reports, the company is ready to raise another round of funding from past investors, including Google. One of the prime independent rivals of OpenAI, the company is in talks with investors to raise around $2 billion in funding.
This comes just a week after Amazon committed $1.25 billion for Anthropic, with plans to invest a total of $4 billion in the future. In return, Amazon expects to be the sole cloud provider for Anthropic.
Interestingly, Google has already made a $300 million investment in Anthropic, acquiring a 10% stake in the company. The two-year old startup that is building Claude, a rival to ChatGPT, now aims to get a valuation between $20 billion to $30 billion, which is ten times more than the current $4 billion after the investment in March.
To put this in perspective, OpenAI roughly has a valuation of around $28 billion after raising several rounds of funds.
The CEO of Anthropic, Dario Amodei, said in a recent interview with Andreessen Horowitz, that the biggest thing that the company wants to do is make Claude have infinite context windows. The only things holding it back, according to Amodei, is that “at some point, it just becomes too expensive in terms of compute”.
It is clear that Anthropic has high expectations when it comes to what it wants to achieve. But it seems like the current funds are holding the company back from its ambitions. It is only fair for the company to go around looking for more funds and raise the stakes for the big-tech.
A tussle with Google?
Interestingly, there are have been rumours about a senior Google engineer delivering some challenging news to over fifty colleagues. Here, a segment of the company’s cloud services, crucial for Anthropic, was experiencing issues necessitating overtime efforts to rectify the situation. To address the problems in their service, specifically, an underperforming and unstable NVIDIA H100 cluster, Google Cloud leadership initiated a month-long, seven-day-per-week sprint.
The consequences of not resolving this issue were deemed substantial, affecting Anthropic primarily but also leaving an adverse impact on Google Cloud and Google as a whole, as per the documents examined by Big Technology.
Just a week after Google launched the sprint, Anthropic announced its deal with Amazon, designating Amazon Web Services as its primary cloud provider for mission-critical workloads. It’s worth noting that the Amazon deal had been in the works for a while and was unrelated to Google Cloud’s performance problems.
Nevertheless, for Google, this development must have been unsettling, especially considering Google had invested all this money into the company. Nevertheless, Anthropic’s new funding from Amazon is undoubtedly a benefit for Google as well, as the value of its share would also increase, not just for Amazon.
On the other hand, Google is already developing its own AI models with Google DeepMind. Gemini, which is expected to be arriving soon, might be the biggest bet the company has made.
While Google may have the capability to manage these endeavours simultaneously, it faces the risk of being outpaced by competitors with fewer complicated trade-offs. Notably, Google Cloud’s performance issues with Anthropic appear to be stabilising, albeit not without requiring engineers to engage in a rare phenomenon at Google — weekend work.
Everyone loves Anthropic
Even though OpenAI is not profitable yet, it is still generating revenue through its offerings. Anthropic also has plans to make its generative AI capabilities generate revenue for itself, and aims for an annualised pace of $200 million. It also hopes to generate a $500 million annualised rate, according to a person with knowledge.
Anthropic believes that these AI models from companies like OpenAI would be ahead of everything in the next few years, and it would be impossible to catch up with them. This is clearly why every AI startup in the world wants its valuation to be the highest at the moment, to stay ahead in the race.
At present, generative AI startups are the biggest draw for investors and cloud providers. Emerging startups such as Mistral AI, Reka AI, Cohere AI, and Inflection AI, all have been raising funds, and have their own strategies for making bucks. Amidst all this, the investors and big-tech are running for their money.
Anthropic has raised the stakes even more, as in the end, the only moat that generative AI companies have is money.
Interestingly, FTX had a $500 million stakeholder in Anthropic. But even after bankruptcy, the Sam Bankman-Fried led company stopped the sale of its shares. Now, three months later, the stakes would be worth $2 billion, effectively making its customers very happy.
How could someone not love Anthropic?
