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Anthropic, the artificial intelligence startup founded by former OpenAI employees and seen as a leading rival, is engaged in advanced financing talks that could value the company at $18.4 billion, according to sources familiar with the matter.
The new $750 million Series C round is reportedly led by Menlo Ventures and would represent a massive 4.5x jump from Anthropic’s previous $4.1 billion valuation several months ago. This underlines the rapid rise and massive investor interest fueling the red-hot AI sector.
Anthropic has already raised $750 million in previous rounds in April and May this year. One of these was led by Google, which took a 10% stake in the company at the time. Building on that relationship, Google agreed in October to invest up to $2 billion in Anthropic going forward.
The upcoming Series C infusion would further cement Anthropic as one of the most richly funded AI startups behind sole industry leader OpenAI. It also highlights Anthropic’s momentum in racing to keep pace with OpenAI amid the AI arms race.
Anthropic was founded by former OpenAI research heads Dario and Daniela Amodei along with other OpenAI alumni. The startup has developed Claude, a chatbot that rivals OpenAI’s wildly popular ChatGPT. Claude is already used by major companies including Slack, Notion and Quora.
Claude can summarize long passages of text of up to 75,000 words and has demonstrated superior accuracy and self-awareness compared to alternatives in third-party testing. This has fueled intense customer demand that Anthropic is rushing to meet.
“It’s a very unusual time from a business perspective because there is so much demand for large language models and actually more demand than the industry can currently provide,” Daniela Amodei said in an interview in July.
The growing demand for AI startups has led to an unprecedented funding frenzy as investors pour in capital. Anthropic’s potential valuation of $18 billion, after massive previous rounds, illustrates the breakneck pace.
Rival OpenAI recently raised $10 billion from Microsoft at a valuation of $29 billion. Other top AI startups Cohere and PolyAI also made nine rounds of numbers during the gold rush.
This flood of funding is fueling a fiercely competitive race to develop the most capable and commercially viable AI applications. Anthropic’s Claude chatbot and upcoming products are squarely aimed at challenging OpenAI’s market leadership.
With Claude’s promising early results and the support of partners such as Google and Salesforce, Anthropic is strengthening its position as a leading competitor. The startup will likely use its war funding to aggressively expand its AI research and engineering ranks.
The red-hot competition is setting up early battles between tech titans like Facebook and Snapchat as they battle for social networking dominance. The AI sphere is now the industry’s most intense arena, with trillion-dollar implications.
Whichever companies build the most sophisticated AI will reap extraordinary benefits. Anthropic has assembled an all-star roster of talent and investors to pursue this prize and take on OpenAI. With billions in new funding, the startup is trying to claim the AI crown for itself.