Google-Backed AI Startup Anthropic Raises $450 Million, Bringing Total Funding to Nearly $1 Billion

Anthropic, an artificial intelligence startup competing with OpenAI in building AI foundation models, said on Tuesday it had raised $450 million (roughly Rs. 3,700 crore) from investors including Alphabet‘s Google and Spark Capital.

The latest round brings Anthropic‘s total funding to nearly $1 billion (roughly Rs. 8,300 crore), making it one of the most well-funded AI startups. The company did not disclose its valuation, but sources put it at nearly $5 billion (roughly Rs. 41,350 crore).

Foundation models are the next wave in AI, trained on a vast quantity of data that can be used for different tasks with minimal fine-tuning, instead of being task-specific.

Fundraising for AI remains a bright spot for startups, which have seen investments slow down. In the first quarter, generative AI companies raised over $1.7 billion (roughly Rs. 14,100 crore) across 46 deals, PitchBook data showed.

Foundation model startups such as OpenAI, Anthropic and Cohere have been racing to raise funding for the expensive development of large models which consume a huge amount of computing power.

Interest in AI has grown after Anthropic’s rival OpenAI launched ChatGPT last year and raised $10 billion (roughly Rs. 82,700 crore) from its strategic backer Microsoft, but regulators are concerned about the potential use of the technology to spread misinformation.

Anthropic, founded by former OpenAI executives, said its AI systems are safe because they would not tell users how to build a weapon or use racially biased language. Its Claude models are seen as major competitors to OpenAI’s GPT-4 as enterprises host events to test models.

Zoom Video Communications, an investor in the round, said last week it would integrate the startup’s models into its video-conferencing platform.

“We believe there will be two big winners and Anthropic has the best research team,” said Matt Murphy, partner at Menlo Ventures, another investor. “We validated the interest from major strategics who have big plans to integrate Anthropic into their applications.”

Other investors in the round include Salesforce and Sound Ventures. Google, which is developing its own foundation model, returns after participating in Anthropic’s last round.

Yasmin Razavi, a general partner at Spark Capital, has joined Anthropic’s board of directors.

© Thomson Reuters 2023

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