Anthropic lining up a new slate of investors, ruled out Saudi Arabia

[Pelican Press 0]

Anthropic lining up a new slate of investors, ruled out Saudi Arabia

Jakub Porzycki | Nurphoto | Getty Images

Deep-pocketed, sovereign wealth funds are among the investors clamoring to get a stake in Anthropic, the red-hot artificial intelligence startup that’s taking on OpenAI. One country that’s being left out: Saudi Arabia.

As bankers line up a group of potential new Anthropic backers, the company has ruled out taking money from the Saudis, according to people familiar with the matter. Anthropic executives cited national security, one of the sources told CNBC. 

The stake in Anthropic is for ***** because it belongs to FTX, the ******* cryptocurrency exchange started by Sam Bankman-Fried, and is being unloaded as part of the company’s bankruptcy proceedings. FTX bought the shares three years ago for $500 million. The 8% stake is now worth more than $1 billion due to the recent ***** in AI.

Proceeds from the ***** will be used to repay FTX customers. The transaction is ongoing and is on track to wrap up in the next couple weeks, said people with knowledge of the talks who asked not to be named because the negotiations are private.

The class B shares, which don’t come with voting rights, are being sold at Anthropic’s last valuation of $18.4 billion, sources said. Anthropic has raised roughly $7 billion in the last few years from tech giants like

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, Alphabet and Salesforce. Its large language model competes with OpenAI’s ChatGPT. 

Anthropic founders Dario and Daniela Amodei have the right to challenge any potential investors, according to the sources. However, they are not involved in the current fundraising process, or in the discussions with potential investors in FTX’s stake. The founders were introduced to Bankman-Fried through

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a philosophy that involves making as much money as possible to give it all away.

Saudi Crown Prince and Prime Minister Mohammed bin Salman meets U.S. Secretary of State Antony Blinken (not pictured), in Jeddah, Saudi Arabia March 20, 2024. 

Evelyn Hockstein | Reuters

While Anthropic’s founders told bankers they wouldn’t accept Saudi money, they don’t plan to challenge funding from other sovereign wealth funds, including ******* ***** Emirates fund Mubadala. The UAE-based firm is actively looking at investing, according to one of the sources.

The potential buyers of FTX’s shares comprise a syndicate of new investors for Anthropic, a source said, meaning

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and Alphabet would not be involved. Part of FTX’s stake is being shopped around through special purpose vehicles, or SPV, which allows multiple investors to pool capital. SPVs have been emailing venture firms to solicit participation, three sources said. Investment bank Perella Weinberg is handling the ***** on behalf of FTX.

Representatives from Anthropic and Perella Weinberg declined to comment on the *****. Mubadala and Saudi Arabia’s Public Investment Fund, or PIF, didn’t immediately respond to a request for comment.

The PIF, Saudi Arabia’s sovereign wealth fund, has more than $900 billion in assets and has been plowing capital into technology to diversify the nation’s revenue away from oil. The fund is in talks with venture firm Andreessen Horowitz to create a $40 billion fund to invest in AI, two sources with knowledge of the matter told CNBC. The discussions were first reported by the New York Times. 

Saudi Crown Prince Mohammed bin Salman’s ambitious “Vision 2030 Initiative” has looked to modernize the economy and strengthen ties in global finance. The PIF has investments in companies including Uber, while also funding the LIV golf league and spending heavily in professional soccer and tennis.

Anthropic’s national security concerns regarding Saudi Arabia could be over dual-use technology — software or tech that can be used for both civilian and military applications. That’s an area of notable focus for the Committee on Foreign Investment in the ******* States (CFIUS), which can block foreign investments from particular sources in certain areas. Saudi Arabia has also been warming to China.

The kingdom’s human rights record ******** a major problem for some Western partners. The most notable case in recent years was the alleged ******** of Washington Post journalist Jamal Khashoggi in 2018, an event that triggered international backlash in the business community.

In November, Bankman-Fried was convicted of seven ********* counts tied to the collapse of FTX. His sentencing is scheduled for next week, and prosecutors are recommending a sentence of 40 to 50 years.

WATCH: Prosecutors recommend a 40-50 year prison sentence for SBF

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