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AI startup Anthropic has decided against accepting investments from Saudi Arabia during the sale of 8% of its shares as part of FTX’s bankruptcy process.
Anthropic’s executives have pointed to these concerns as the basis for excluding Saudi Arabian participation, as reported by CNBC.
Bankman-Fried acquired the stake three years prior for $500 million. Due to the recent increase in interest surrounding AI technologies, the value of the 8% stake has now surpassed $1 billion.
The funds generated from the stake sale will be utilized to reimburse FTX customers, with the transaction anticipated to finalize within the upcoming weeks, according to sources who have requested anonymity due to the sensitive nature of the discussions.
Reports indicate that the class B shares, which do not provide voting rights, are being sold based on Anthropic’s latest valuation of $18.4 billion.
In recent years, Anthropic has secured approximately $7 billion from major tech companies such as Amazon, Alphabet, and Salesforce.
The company’s sophisticated language model competes directly with OpenAI’s ChatGPT.
While founders Dario and Daniela Amodei maintain the authority to contest potential investors, they are not currently engaged in the fundraising efforts or discussions concerning FTX’s stake.
The Amodei siblings were introduced to Bankman-Fried through the principle of “effective altruism,” which focuses on maximizing wealth for philanthropic purposes.
AI startup Anthropic strategically excludes Saudi investors in FTX stake sale due to security concerns, valuing Anthropic at $18.4 billion. Complex negotiations underway. Geopolitical factors shaping AI investment landscape.
— Kelvin Zinck (@KelvinZinck) March 23, 2024
UAE Considering Investing in Anthropic
While Anthropic has clearly stated its refusal to accept investments from Saudi Arabia, it does not intend to oppose funding from other sovereign wealth funds, including the United Arab Emirates’ Mubadala.
One source indicates that Mubadala, located in the UAE, is actively contemplating an investment in Anthropic.
The prospective buyers for FTX’s shares comprise a consortium of new investors for Anthropic, excluding Amazon and Alphabet.
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FTX’s stake is being marketed through special purpose vehicles (SPVs), which enable multiple investors to combine their capital.
Venture firms have received communications from SPVs inviting participation in the sale, according to three sources.
Perella Weinberg, an investment bank, is overseeing the sale on behalf of FTX.
Saudi Arabia’s Sovereign Wealth Fund Invests in Tech
PIF, Saudi Arabia’s sovereign wealth fund with assets exceeding $900 billion, has been significantly investing in technology to diversify the nation’s revenue streams away from oil.
The fund is reportedly in talks with venture firm Andreessen Horowitz to establish a $40 billion fund focused on AI investments, as reported by CNBC based on sources familiar with the situation.
Saudi Crown Prince Mohammed bin Salman’s ambitious “Vision 2030 Initiative” seeks to modernize the economy and enhance global financial connections.
PIF has invested in companies such as Uber and has also financed the LIV golf league while making substantial commitments to professional soccer and tennis.
Anthropic’s national security apprehensions regarding Saudi Arabia may pertain to dual-use technology, which refers to software or technology that can serve both civilian and military purposes.
This concern aligns with the focus of the Committee on Foreign Investment in the United States (CFIUS), which has the authority to block foreign investments from specific sources in certain sectors.
It is important to note that Saudi Arabia has also been fostering closer relations with China.
In November, Sam Bankman-Fried, the founder of FTX, was found guilty on seven criminal charges related to the collapse of the exchange.
His sentencing is set for next week, with prosecutors recommending a sentence of 40 to 50 years.
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