Just days after securing a major investment from Amazon, AI startup Anthropic is reportedly now in talks to raise at least $2 billion in new funding from Google and other investors according to sources familiar with the matter.
The fast-growing San Francisco AI research lab announced last week a $1.25 billion investment from Amazon (with the potential for an additional $2.75 billion). Now, Anthropic aims to further capitalize on surging investor interest in the AI sector by pursuing additional capital. Google, which took roughly a 10% stake in Anthropic last year, is expected to participate.
Anthropic is known for its Claude large language model and competes directly with OpenAI's GPT. The company is aiming for a valuation between $20 billion to $30 billion, inclusive of this new investment. This ambitious valuation target would be a 5X jump from March's $4 billion valuation, positioning Anthropic's shares at a premium compared to OpenAI's, especially when considering revenue valuation multiples.
Anthropic has informed some investors that it has a $100 million annualized revenue rate—suggesting it has generated more than $8 million in revenue per month. To put this in perspective, that would mean that an investment at a $20 billion valuation would carry a valuation multiple on future revenue of 200 times revenue. In contrast, OpenAI is reportedly aiming for a valuation of at least $80 billion in its upcoming employee share sale. This would place OpenAI's revenue valuation multiple at around 80 times, a figure which is still considerably higher than most public tech stocks.
By the end of the year, Anthropic says it projects nearly $17 million in monthly revenue, with aspirations to reach a $500 million annualized rate by the end of 2024. A significant catalyst for this projected growth is Anthropic's recent partnership with Amazon, which will see the cloud giant selling the startup's AI software to its cloud clientele. Notable customers such as LexisNexis, Bridgewater Associates, and Lonely Planet are already utilizing Claude via Amazon Web Services.
After OpenAI exclusively aligned with Microsoft earlier this year, AI research labs have been looking to establish similar relationships with tech giants to gain funding, cloud infrastructure and sales support.
Beyond the financial investment, Amazon's recent partnership with Anthropic designated AWS as Anthropic's "primary cloud provider". Additionally, as part of their agreement, Anthropic has committed to utilizing Amazon's specialized server chips instead of NVIDIA's to build, train and deploy its flagship Claude model and future foundation models.
If Anthropic secures further investment from Google, it could lead to questions about the startup's allegiance between the two competing cloud providers. Google already offers its own state-of-the-art foundational AI models, aims to cater to cloud customers. In contrast, AWS, lacking a comparable in-house AI, has sought collaborations with firms like Anthropic or open source solutions like Llama 2 to bolster its offerings.
As the AI industry continues its rapid ascent, the race for capital, computing resources, and strategic partnerships is intensifying. Anthropic's recent funding endeavors underscore the high stakes and the immense potential that industry leaders and investors see in the transformative power of artificial intelligence.
However, the ballooning valuations also carry substantial risks. Anthropic's reported $20 billion to $30 billion target would be exceptionally high for a startup with limited operating history and unproven long-term viability.
While these valuations reflect investor optimism about AI's future, they could prove precariously inflated, especially if growth slows. And with multiple players fiercely competing, not every hopeful AI startup may survive long-term. For Anthropic and others, effectively deploying the capital raised will be crucial to justifying towering valuations.
Ultimately, realizing AI's vast potential while delivering value to match investors' high expectations will be no easy feat. Moreover, with significant investments come increased scrutiny and the need for transparent governance, especially in a field as influential and potentially disruptive as AI. Balancing innovation with responsibility, and growth with stability, will be paramount for Anthropic and its peers as they chart the future of artificial intelligence.
Additionally, the unknown future of AI regulation adds further uncertainty. As governments grapple with the impacts of rapidly advancing AI systems, new policies could constrain business models and hamper growth. Navigating regulatory shifts will require agility and foresight.
Companies will need to execute strategically and rapidly innovate to warrant the bets being placed on them. If they falter, the AI unicorns flying highest today could come crashing down to earth just as quickly tomorrow.