Anthropic is lining up a new list of investors, excluding Saudi Arabia

Deep-pocketed sovereign wealth funds are among investors clamoring for a stake in Anthropic, the hot artificial intelligence startup taking on OpenAI. One country that was left out: Saudi Arabia.

As bankers line up a pool of potential new backers for Anthropic, the company has ruled out taking money from the Saudis, according to people familiar with the matter. Anthropic executives cited national security, one of the sources told CNBC.

The stake in Anthropic is being sold because it belongs to FTX, the failed cryptocurrency exchange started by Sam Bankman-Fried, and is being unloaded as part of the company’s bankruptcy proceedings. FTX bought the stock three years ago for $500 million. The 8% stake is now worth more than $1 billion due to the recent AI boom.

Proceeds from the sale will be used to pay FTX customers. The transaction is ongoing and on track to close in the next few weeks, said people familiar with the negotiations, who spoke on condition of anonymity because the negotiations are private.

The Class B shares, which do not come with voting rights, are being sold at Anthropic’s latest valuation of $18.4 billion, sources said. Anthropic has raised roughly $7 billion over the past few years from tech giants like Amazon, Alphabet and Salesforce. Its large language model competes with OpenAI’s ChatGPT.

Anthropic founders Dario and Daniela Amodei have the right to challenge any potential investor, according to the sources. However, they are not involved in the current fundraising process or discussions with potential investors in FTX shares. The founders were introduced to Bankman-Fried through “effective altruism”, a philosophy that involves making as much money as possible to give it all away.

Although Anthropic’s founders have told bankers they will not accept money from Saudi Arabia, they do not plan to challenge funding from other sovereign wealth funds, including the United Arab Emirates’ Mubadala fund. The UAE-based firm is actively seeking investment, according to one of the sources.

Potential buyers of the FTX shares consist of a syndicate of new investors for Anthropic, a source said, meaning Amazon and Alphabet will not be involved. A portion of FTX’s stake is traded through special purpose vehicles, or SPVs, which allow multiple investors to pool capital. SPVs have been emailing venture firms to solicit participation, three sources said. Investment bank Perella Weinberg is managing the sale on behalf of FTX.

Representatives for Anthropic and Perella Weinberg declined to comment on the sale. Mubadala and Saudi Arabia’s Public Investment Fund, or PIF, did not immediately respond to a request for comment.

The PIF, Saudi Arabia’s sovereign wealth fund, has more than $900 billion in assets and is investing capital in technology to diversify the nation’s oil revenues. The fund is in talks with venture firm Andreessen Horowitz to create a $40 billion fund to invest in AI, two sources familiar with the matter told CNBC. The discussions were first reported by the New York Times.

Saudi Crown Prince Mohammed bin Salman’s ambitious Vision 2030 Initiative aims to modernize the economy and strengthen ties in global finance. PIF has investments in companies including Uberwhile also funding the LIV Golf League and spending heavily on professional football and tennis.

Anthropic’s national security concerns regarding Saudi Arabia may be related to dual-use technology — software or technology that can be used for both civilian and military applications. This is an area of ​​notable focus for the Committee on Foreign Investment in the United States (CFIUS), which can block foreign investment from certain sources in certain areas. Saudi Arabia has also warmed to China.

The kingdom’s human rights record remains a major concern for some Western partners. The most notable case in recent years was the alleged assassination of Washington Post journalist Jamal Khashoggi in 2018, an event that sparked an international backlash in the business community.

In November, Bankman-Fried was convicted of seven criminal charges related to the FTX collapse. His sentencing is scheduled for next week, and prosecutors are recommending a sentence of 40 to 50 years.

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