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. One of the main independent rivals of OpenAI, the company is talking to investors to raise around $2 billion in funding. This is just a week after the company made a commitment of $1.25 billion from Amazon. The best part is that Google is expected to be a part of this round again.
Interestingly, Google already made a $300 million investment in Anthropic, acquiring a 10% stake in the company. The two-year old startup that is building Claude, its rival to ChatGPT now aims to get a valuation between $20 billion to $30 billion, making its valuation around ten times more than the current one, which is $4 billion after the investment in March.
To put this in perspective, OpenAI has roughly a valuation of around $28 billion after raising several rounds of funds. This makes Anthropic one of the closest competitors to OpenAI.
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, “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 and look for more funds, and raise the stakes for the big-tech.
A tussle with Google?
Interestingly, there are some other rumours. A senior Google engineer delivered some challenging news to over fifty colleagues. 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 casting an adverse impact on Google Cloud and Google as a whole, as per documents examined by Big Technology.
Just one 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 newfound funding from Amazon is undoubtedly a benefit for Amazon and may leave Google somewhat perplexed.
On the other hand, Google is already developing its own AI models with Google DeepMind. Its Gemini, which seems 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.
OpenAI went from $25m run rate to $1bn in a year, Anthropic from < $10m to $200m this year, $500m next year
It looks like they are raising at 100x sales, but have you ever seen sales growth that high?
And the enterprise market hasn't even started yet, gen AI will be everywhere— Emad (@EMostaque) October 4, 2023
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.
Generative AI startups are all the fun now 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.
On a very interesting note, FTX, had a $500 million stakeholder in Anthropic. But even after its bankruptcy, 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?
With Anthropic rumoured to be raising at a $20-30B valuation, FTX’s stake in it could be worth ~$3B+
That may be enough to make all of FTX’s creditors whole— Tanay Jaipuria (@tanayj) October 4, 2023
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