Anthropic, OpenAI's closest rival, is finalizing a new round of funding, The Wall Street Journal reported on Monday. Anthropic is negotiating a $3.5 billion funding round, much larger than previously expected. Anthropic initially planned to raise $2 billion, but managed to raise the amount during negotiations with investors, highlighting the continued high level of investor interest.
Anthropic was previously valued at $18 billion, and the latest funding will roughly triple its valuation to $61.5 billion. The $61.5 billion valuation includes the cash Anthropic raised in this round.
The round was led by Lightspeed Ventures, with participation from General Catalyst and Bessemer Venture Partners, according to people familiar with the matter. MGX, an ABU Dhabi-based investment company, is also in talks to participate.
Anthropic's annualized revenue (projected for the next 12 months based on recent sales) has reached about $1.2 billion, according to people familiar with the company. Still, the company is losing money. By comparison, OpenAI told investors during a funding round last October that its 2024 revenue is expected to reach $3.7 billion.
Details of Anthropic's latest funding round have not been made public.
Founded in 2021 by former OpenAI employees, Anthropic is considered one of the few AI startups with enough talent and funding to compete with OpenAI. While Anthropic still lags behind OpenAI in the consumer market, its Claude chatbot is becoming increasingly popular among programmers and enterprise customers.
Anthropic plans to use the funding to support the training of more powerful AI models. On the same day, Anthropic released its most intelligent AI model ever, which combines "inference mode" and "traditional mode" :
The company claims that Claude 3.7 Sonnet's "hybrid" model is capable of both "inference mode" (stopping to think about complex answers) and traditional mode (generating answers in real time), and says it is the only such "hybrid" model on the market.
Analysts believe that this move will help Anthropic gain a much-needed edge in the fierce competition among technology companies.
Since the launch of DeepSeek's new model, some Silicon Valley investors have worried about the prospects of AI companies such as Anthropic, because DeepSeek's model can perform as well as the best US AI, but at a fraction of the cost and free to use.
Anthropic CEO Dario Amodei has previously blogged that DeepSeek's breakthrough will not change the economics of AI research and development. He believes that DeepSeek's training cost reduction is in line with industry trends and does not represent a breakthrough technical achievement:
If the downward trend in AI training costs is four times per year, and if the training cost of DeepSeek-V3 is about eight times lower than the current US model developed a year ago, that is actually completely in line with the normal trend. Even with DeepSeek's training cost data, they are only on the trend line, and may not even be quite there yet.
Anthropic's larger-than-expected funding round shows that investors are still willing to bet on companies developing proprietary AI models.
As previously reported, OpenAI is also in talks for a new round of funding of up to $40 billion, which would value it at $300 billion. Musk's xAI has also held informal financing talks with potential investors.
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