Anthropic set to hit $170B valuation in new funding round
What's the story
Artificial intelligence (AI) start-up Anthropic is close to raising up to $5 billion in a new funding round, according to Bloomberg. The deal, led by investment firm Iconiq Capital, would value the company at an impressive $170 billion. The funding round is expected to be between $3 billion and $5 billion, with Iconiq potentially investing around $1 billion.
Financial growth
Revenue is on the rise
Anthropic's revenue has seen a massive jump recently. Earlier this month, the company had a revenue run rate of about $4 billion. By the end of July, that number had increased to around $5 billion. The company expects its revenue run rate could reach as high as $9 billion by the end of this year.
Market response
Valuation boost and investor interest
The new funding round would significantly increase Anthropic's valuation and solidify its position as a top AI player. Earlier this year, the company was valued at $61.5 billion in a $3.5 billion round led by Lightspeed Venture Partners. Other potential investors for the current funding round include Qatar Investment Authority, Singapore's sovereign fund GIC, and Amazon, which has previously invested billions in the company.
Positioning
Competing with AI giants
The new funding will help Anthropic compete with OpenAI and Elon Musk's xAI, both of which have raised billions this year. These funds are being used to invest in data centers and talent for building AI models. Anthropic has taken checks no smaller than $200 million in the current deal, with a second lead investor possibly joining the talks.
Ethical considerations
Shifting funding principles
Anthropic CEO Dario Amodei recently admitted the need to raise funds from the Middle East, despite earlier concerns about accepting money from authoritarian countries. In a memo to employees, he wrote, "Unfortunately, I think 'No bad person should ever benefit from our success' is a pretty difficult principle to run a business on." This highlights the ethical dilemmas faced by companies in their funding strategies.