Lets break down the recent $300M investment in Anthropic by Google yesterday. One important thing to look at here that is driving the last two large investments is they were from big tech players, but more specifically, two big CLOUD players. To do generative AI, you need a metric shit load of horsepower (fancy science terminology). OpenAI, is built on Azure, MSFT’s cloud infrastructure, while Anthropic is built on Google’s Cloud. This is not a coincidence that investment has come from their cloud provider. One major reason is creative deal structure, as they can do some of the investment in cloud credits instead of straight cash, and can also provided discounted services to a company they have an investment in to help them succeed. All actual details of the deal are not disclosed at this time. Who is Anthropic? Founded in 2021, by Dario Amodei (OpenAI’s ex VP of research) and his sister Daniela. They have a competing model to OpenAI’s GPT3 called “Claude.” The founding goal of Anthropic was to create AI models that had more control in an industry that primarily focuses on efficiency, power, and scale instead of control of results. ”“Large, general systems of today can have significant benefits, but can also be unpredictable, unreliable, and opaque: our goal is to make progress on these issues,” - quote from Dario when launching. This ethos jives very well with google’s current stance of also focusing on control and accuracy of their products. Anthropic raised $124 million in seed funding in 2021 from Skype co-founder Jaan Tallinn, and included James McClave, Dustin Moskovitz, Eric Schmidt and the Center for Emerging Risk Research, among others. They have raised $700M before google’s recent investment, but that funding also comes with some complications as $500M was from Alameda Research, a crypto hedge fund of Sam Bankman-Fried (Dont have time to explain that one, google it if you have been living under a rock…). Financial times stated that “ FTX’s bankruptcy estate has flagged Anthropic as an asset that may help creditors with recoveries.” The deal: $300M for roughly 10% of the company. Anthropic does have a pretty standard corporate structure with two classes of shares, one with 10x voting rights to the other to maintain founder control. This makes a ton of sense as well because one of the primary catalysts for Dario leaving OpenAI was a disagreement on the direction he thought the company was going in after taking one of the initial investments from MSFT. #ai #anthropic #google