Anthropic, a San Francisco-based artificial intelligence startup, is close to raising roughly $300 million in new funding, two people with knowledge of the situation said, in the latest sign of feverish enthusiasm for a new class of AI startups.
The deal could value Anthropic at about $5 billion, though terms are still being worked out and the valuation could change, one of the people said. The startup, which was founded in 2021, previously raised $704 million, valuing it at $4 billion, according to PitchBook, which tracks private investment data.
Silicon Valley has been hit by a frenzy over startups working on “generative” AI, technologies that can generate text, images and other media in response to brief prompts. This week, Microsoft invested $10 billion in OpenAI, the San Francisco startup that sparked a furor in November with a chatbot, ChatGPT. ChatGPT has captivated over a million people with his ability to answer questions in clear and concise prose.
Even as funding for other startups has dried up, investors have sought deals at similar AI firms, signaling that the otherwise bleak tech investment market has at least one silver lining. .
Other funding deals in the works include Character.AI, which allows people to talk to chatbots that impersonate celebrities. The startup has been in talks about a large funding round, according to three people with knowledge of the situation.
Replika, another chatbot company, and You.com, which is implementing similar technology into a new type of search engine, said they too had received unsolicited interest from investors.
They all specialize in generative AI. The result of more than a decade of research inside companies like OpenAI, these technologies are poised to remake 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 seen investors and start-ups competing 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.
The stakes are high. Venture capital investors typically do not back multiple companies in one category for competitive reasons. Therefore, a bad bet now could result in a missed opportunity to make money on other trades in the future.
Despite the excitement, few of these startups have a clear plan for making money. That has rarely been a problem in Silicon Valley; Past generations of investors poured money into social networking sites or mobile apps on the assumption that they would figure out how to make a profit later.
But that strategy has been a less safe bet in recent years, as startups have expanded beyond the tech industry’s bread and butter of selling software or selling ads. Certain businesses, such as on-demand delivery, ride-hailing apps and subscription meal kits, took longer to make money than investors expected or made no money at all.
Anthropic was founded by a group of people that included several researchers who left OpenAI. His funding talks stand out because of his previous sponsors. The vast majority of its funding came from disgraced cryptocurrency entrepreneur Sam Bankman-Fried and his colleagues at FTX, the cryptocurrency platform that went bankrupt amid fraud charges last year. That money could be recovered by a bankruptcy court, leaving Anthropic in limbo.
