Anthropic, a San Francisco-based artificial intelligence startup, is on the verge of raising about $300 million in new funding, two people with knowledge of the situation said, in the latest sign of fevered enthusiasm for a new class of AI -Start-ups.
The deal could value Anthropic at around $5 billion, although terms are still being worked out and the valuation could change, one of the people said. Founded in 2021, the startup previously raised $704 million and valued it at $4 billion, according to PitchBook, which tracks private investment data.
Silicon Valley has been gripped by a frenzy for startups working on “generative” AI, technologies that can generate text, images, and other media in response to brief prompts. In this week, Microsoft has invested $10 billion in OpenAIthe San Francisco start-up that caused a sensation with a chatbot in November, ChatGPT. ChatGPT has delighted more than a million people his talent for answering questions in clear, concise prose.
Even if funding for other start-ups has dried up, Investors have been pursuing deals with similar AI companiessuggesting that the otherwise dismal tech investment market has at least one bright spot.
Other funding deals in the works include Character.AI, which allows people to talk to chatbots posing as celebrities. The start-up has been in talks about a large round of financing, said three people with knowledge of the situation.
Replica, another chatbot company, and You.com, which is bringing similar technology to a new breed of search engine, said they too have received unsolicited interest from investors.
All specialize in generative AI. The result of more than a decade of research at companies like OpenAI, these technologies are poised to redesign everything from online search engines like Google Search and Microsoft Bing to photo and graphics editors like Photoshop.
The explosion of interest in Generative AI has investors and startups racing to choose their teams. Startups want to take money from the most powerful investors with the deepest pockets, and investors are trying to pick winners from a growing list of ambitious companies.
It’s about a lot. Venture capital investors typically do not back multiple companies in one category for competitive reasons. So, a bad bet could result in a missed opportunity to make money later on other deals.
Despite the excitement, few of these startups have a clear plan to make money. That was rarely a problem in Silicon Valley; Previous generations of investors poured money into social media sites or mobile apps, assuming they would figure out how to turn a profit later.
But that strategy has been less secure in recent years as startups have expanded beyond the bread and butter of the tech industry by selling software or selling ads. Certain companies, like on-demand delivery, ride-hailing apps, and subscription meal packages, took longer to make money than investors hoped or didn’t make any money at all.
Anthropic was founded by a group of people that included several researchers who have left OpenAI. His funding talks are notable for his past backers. The vast majority of its funding came from disgraced cryptocurrency entrepreneur Sam Bankman-Fried and his colleagues from FTX, the cryptocurrency platform that went bankrupt last year amid allegations of fraud. That money could be reclaimed by a bankruptcy court, leaving Anthropic in limbo.
