Anthropic Said to Be Closing In on $300 Million in New A.I. Funding

According to two sources, Anthropic is in close proximity of raising $300 million in new funding. It is the latest sign that there is feverish excitement for an A.I. company. start-ups.

Anthropic’s potential value could reach $5 billion. However the terms of the deal are still being worked through and the valuation may change, one person said. According to PitchBook which tracks private investments data, the start-up was valued at $4 billion after it raised $704 million.

Silicon Valley has been gripped by a frenzy over start-ups working on “generative” A.I., technologies that can generate text, images and other media in response to short prompts. This week Microsoft invested $10 billion in OpenAIThe San Francisco startup ‘Startup X’, which launched the furore in November with a chatbot. ChatGPT. ChatGPT has been loved by more than one million people its knack for answering questions in clear, concise prose.

Even though funding for start-ups in other industries has dried up investors have chased deals in similar A.I. companiesIt is an indication that there is at least one bright side to the otherwise grim market for tech investment.

Character.AI is another funding option. It allows users to talk to chatbots who impersonate celebrities. Three people familiar with the situation say that discussions were held regarding a large round.

Replika, another chatbot startup, and You.com (which is rolling out similar technology to a new type of search engine), both said that they had also received unrestricted interest from investors.

All specialize in generative A.I. These technologies are the result of more than a decade’s research at companies like OpenAI. They can be used to transform everything, from online search engines like Google Search or Microsoft Bing to photo editors and graphics editors like Photoshop.

There has been a lot of interest in generative A.I. Both investors and start ups are racing for the best teams. Investors are looking to select winners from an expanding list of ambitious start-ups to get money from the richest investors.

There are huge stakes. Venture capital investors rarely back multiple companies within a single category. This is because they are more competitive. A bad investment now could cost you the chance to profit from other deals later.

Many of these start-ups don’t have a clear strategy for making money, despite all the excitement. Silicon Valley has seen this as a rare problem. Previous generations of investors have invested heavily in mobile apps and social media sites with the assumption that they would make a profit.

But that strategy has been less of a sure bet in recent years as start-ups have expanded beyond the tech industry’s bread and butter of selling software or selling ads. Some businesses, such as on-demand delivery and ride-hailing apps, or subscription meal kits, did not make the money investors expected, or took longer than they anticipated.

Anthropic was founded in 2009 by a group that included OpenAI-exempt researchers. Because of its early backers, Anthropic’s funding talks stand apart. It received the vast majority of its funding. came from the disgraced cryptocurrency entrepreneur Sam Bankman-FriedFTX, the cryptocurrency exchange that was bankrupted last year due to fraud charges. Anthropic may be able to get that money back from the bankruptcy court.