AI startup Anthropic has decided not to accept investments from Saudi Arabia for the sale of an 8% stake in the company, originally purchased by Sam Bankman-Fried three years ago for $500 million.
This decision is made amidst the bankruptcy proceedings of FTX, and the stake, spurred by the booming interest in AI technologies, is now valued at over $1 billion.
The rejection of Saudi investments is attributed to national security concerns, particularly regarding the potential dual-use of technology for civilian and military applications, which could complicate matters with regulatory bodies like the Committee on Foreign Investment in the United States (CFIUS).
The sale, expected to finalize in the coming weeks, aims to use the proceeds to repay FTX customers.
The shares, classified as class B and lacking voting rights, are valued based on Anthropic’s latest $18.4 billion valuation.
Despite the company’s significant funding rounds totaling about $7 billion from tech behemoths such as Amazon, Alphabet, and Salesforce, the current transaction excludes these entities from the pool of potential buyers.
Instead, the sale is targeted towards a new investor syndicate through special purpose vehicles (SPVs), with venture firms being approached to participate.
Anthropic, known for its advanced language model competing with OpenAI’s ChatGPT, is led by founders Dario and Daniela Amodei.
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Although they have the right to vet investors, they are not directly involved in the ongoing sale discussions.
Their acquaintance with Bankman-Fried was facilitated by a mutual interest in “effective altruism,” aimed at leveraging wealth for charitable causes.
While rejecting Saudi Arabian funds, Anthropic is open to investments from other sovereign wealth entities, including the UAE’s Mubadala, which is reportedly considering an investment.
The marketing of FTX’s stake is managed by Perella Weinberg.
Saudi Arabia’s sovereign wealth fund, the PIF, with assets over $900 billion, continues its aggressive technology sector investments, including talks with Andreessen Horowitz for creating a $40 billion AI-focused fund.
These moves align with Crown Prince Mohammed bin Salman’s “Vision 2030 Initiative” to diversify the nation’s economy beyond oil, including investments in global tech companies, sports leagues, and enhancing international financial relationships.
This backdrop adds complexity to Anthropic’s decision, especially as Saudi Arabia seeks to strengthen its tech capabilities amid growing ties with China.
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