Delve into the World of Anthropic, one of the Most Sought-after AI Startups

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In the past year alone, the company has secured a staggering $7.3 billion in funding, reshaping the landscape of deal-making in Silicon Valley as the allure of artificial intelligence continues to grow.

In May, Anthropic, among the most prominent artificial intelligence startups globally, garnered $450 million from investors such as Google and Salesforce, marking the commencement of an extraordinary funding campaign. Subsequently, by August, Anthropic had attracted $100 million from two Asian telecom companies. The momentum continued as Amazon pledged $4 billion, succeeded by an additional $2 billion infusion from Google.

This month, Menlo Ventures, the venture capital firm, finalized a $750 million investment deal with Anthropic.

In total, the artificial intelligence startup amassed a staggering $7.3 billion within a year. What set apart its five funding deals was not only their rapid pace and substantial size but also their unconventional structures.

In one of these deals, Anthropic agreed to utilize technology like chips and cloud computing services provided by the investing companies. This arrangement essentially meant that a portion of the raised funds would be reinvested into its backers. Additionally, to streamline smaller investors interested in Anthropic, Menlo established a legal entity known as a “special purpose vehicle.”

“These deals are incredibly complex,” remarked Dave Brown, a vice president at Amazon Web Services who played a role in negotiating Amazon’s arrangement with Anthropic.

Despite the promise of artificial intelligence to revolutionize various sectors of society, it has begun by disrupting the traditional landscape of start-up financing in Silicon Valley. Typically, young companies secure funding every 15 months or so, demonstrating growth in their businesses. However, since the emergence of generative AI—capable of producing text, images, sounds, and video—in late 2022, the conventional playbook has been discarded, as investors vie for a share of the most sought-after developers.

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