OpenAI Competitor Anthropic Secures $450m In Latest Funding Round, With Google As Backer
Key takeaways
- Generative AI firm Anthropic has raised $450m in its Series C funding round, led by Spark Capital and with Google and Zoom as backers
- The company has ChatGPT competitor called Claude, which the funding will be used to continue development on
- Google will be hoping that it’s involvement (and further development of Bard) will help it catch up to the early lead in the ‘AI wars’ taken by Microsoft in their backing of OpenAI
Anthropic AI, creator of the mysterious Claude chatbot and a potential serious competitor to OpenAI’s ChatGPT, has announced it’s raised $450m in its latest funding round. The news comes as the company’s fortunes grow, with Google Cloud and Zoom partnerships already announced in recent months.
As the company goes from strength to strength, it’s stressed the funding will go towards AI safety as well as developing its Claude model further. A good thing to hear, given AI regulation is moving at a snail’s pace compared to the speed of AI development.
We’ve got the lowdown below on the Anthropic funding round including who was involved, how the funding will be used and what the wider AI picture is shaping up like.
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What’s the Anthropic news?
Anthropic has announced it has raised $450 million in its latest funding round. It was back in March when Anthropic first confirmed they would be fundraising, but it was only thought to be around $300 million.
Anthropic will probably hope people forget about its Series B funding round in 2022, which totaled an impressive $580 million but was led by crypto scam artist Sam Bankman-Fried and his second-in-command, Caroline Ellison. Awkward.
This time, the Series C funding had a completely different make-up as venture capital firms are keen to get in on the AI action. The funding round was led by Spark Capital, whose general partner Yasmin Razavi joins Anthropic’s board of directors, and included the likes of Menlo Ventures, Salesforce Ventures and Ashton Kutcher’s firm Sound Ventures.
Zoom Ventures, which video call company Zoom owns, was another investor in the round. Just last week, Zoom announced its partnership with Anthropic where the video conferencing software business will integrate Anthropic’s AI system Claude for its Zoom Contact Center portfolio to start with.
Google was another backer in the round, having already invested what’s reported to be between $300 and $400 million earlier this year. After being caught somewhat off-guard by how quickly generative AI has entered the market, the search engine giant is likely looking for a partnership similar to Microsoft’s $10 billion multi-year investment with OpenAI.
According to Crunchbase estimates, the generative AI company has now had roughly $1.45 billion in outside investment (SBF’s investment is allegedly a third of that total). The company is said to be worth over $4 billion.
What will Anthropic use the funding for?
Anthropic have been developing their ChatGPT competitor, Claude, for some time, having first unveiled the model in March this year. In a blog post, they describe it as “an AI assistant that can perform a wide variety of conversational and text processing tasks”. Claude hasn’t been released widely as of yet, but access can be requested directly via the company.
The funding is going towards further developing the Claude system and supporting “our continued work developing helpful, harmless, and honest AI systems”. The blog post mentions explicitly continuing to work on AI safety – a hot topic since ChatGPT first wowed consumers and the markets alike.
The AI wars heat up
After a slow start, Google seems to be firmly in the AI race, with this latest investment another good sign for traders. Alphabet’s share price has risen 37% this year as it raced to catch up with Microsoft in the AI wars.
Google stock was up this week after a note from analysts at the Bank of America
BAC
But Microsoft is far from giving up. OpenAI has now launched an app for ChatGPT, which in its first few days, has generated over 770,000 downloads. Microsoft’s stock is up 32% this year thanks to its headstart in AI, integrating OpenAI’s tech into its products for consumers and enterprises.
And it’s for good reason: investors can’t get enough of the buzzy new tech. The five biggest stocks in the S&P 500 – Apple, Microsoft, Google, Amazon and Nvidia – are worth a combined $9 trillion thanks to share price rallies bolstered by AI news.
AI safety not keeping pace
But with the likes of chatbots Claude, Bard and ChatGPT comes a growing risk of AI being trained on data people haven’t consented for it to access, and of course, the stuff of science-fiction nightmares: an AI overlord that rapidly outstrips humanity’s intelligence.
Thankfully, steps are being taken to address the issue. Last week OpenAI CEO Sam Altman and other AI experts testified in front of Congress to start developing AI regulation. Altman argued for independent audits, a standard set of AI safety rules and an agency that can give and take away licenses for AI companies to operate.
The EU is also moving forward with its Artificial Intelligence Act, which the European Parliament voted in favor of earlier this month. The Act is designed to protect creators and their copyright by having AI companies disclose the material they’re training their models on.
The Act will also take a risk-based approach and ban anything that sounds too creepy: remote facial recognition, social scoring systems and using data without consent are set to be subject to bans and fines for the companies using AI for these purposes.
The bottom line
Anthropic’s latest funding round is a sure sign we won’t see AI development slowing down any time soon. With the transformative potential of the new tech, it’s no wonder venture capitalists are getting in early to reap the rewards once the IPO market heats up again.
Anthropic’s focus on safety is another good sign. However, investors should keep an eye out for the latest legislative updates to ensure these start-ups stay on the right side of regulation when it is introduced – or it could be disastrous for the stock.
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