FTX To Sell Majority Investment In AI Startup Anthropic For $884 Million

According to a document filed late Friday with a Delaware court, bankrupt cryptocurrency exchange FTX has reached an agreement with a group of bidders to sell the majority of its interest in artificial intelligence firm Anthropic for $884 million, as per a CNBC report.

TakeAway Points:

  • Sam Bankman-founded cryptocurrency exchange FTX has agreed to sell the majority of its investment in artificial intelligence startup Anthropic for $884 million.
  • Mubadala, a firm affiliated with the United Arab Emirates’ national wealth fund, is the major buyer.
  • Other investors include the Ford Foundation, venture capital firm HOF Capital, Jane Street, and funds under Fidelity management.

Anthropic Investments for $884 Million

The March 22 document identifies a variety of bidders, with ATIC Third International Investment Co.—a company affiliated with Mubadala, the United Arab Emirates’ sovereign wealth fund—earning the biggest share. That group is investing about $500 million in Anthropic stock.

According to reports, FTX’s Anthropic investment was being chased by several sovereign wealth funds. National security considerations expressly disqualified Saudi Arabia, according to sources who spoke with CNBC on Friday. To try to attract talent from the UAE and diversify away from oil, the kingdom has been pouring billions of dollars into tech investment funds. 

Anthropic Deal

After Sam Bankman-Fried, the founder of FTX, left the company to start his own venture, Jane Street is the second-biggest buyer in the Anthropic deal. Previously employed at Jane Street, Caroline Ellison was the CEO of Alameda Research, FTX’s sister hedge fund. About $100 million worth of shares are being bought by the business.

Craig Falls, the head of quantitative analysis at Jane Street, has also suggested purchasing shares directly for about $20 million.

Among the roughly two dozen buyers are the Ford Foundation, HOF Capital, a venture firm, and funds under the management of Fidelity Management.

Judge John Dorsey, who is in charge of FTX’s Delaware bankruptcy case, must approve the deals before they are final. If authorised, the sales would amount to about two-thirds of FTX’s Anthropic shares in total.

Bankman-Fried was found guilty in November of seven criminal offences related to the demise of FTX. The prosecution has recommended a sentence ranging from 40 to 50 years, and his sentencing is set for this Thursday.

Anthropic and OpenAI

Prior to the generative AI boom, in 2021, Anthropic was created by former workers of OpenAI, and FTX invested $500 million in the company under Bankman-Fried’s direction. In December 2023, the company’s valuation reached $18 billion, meaning that FTX’s approximately 8% share was valued at nearly $1.4 billion.

The bankruptcy estate has been trying to sell its Anthropic shares for months in an effort to reimburse clients who lost money when FTX failed in late 2022. Over the past three years, Anthropic has raised $7 billion from major tech giants such as Amazon and Alphabet. In less than ten months, the worth of rival OpenAI soared to $80 billion.

Under the leadership of its new CEO, John Ray III, FTX has been recovering money, high-end real estate, cryptocurrency, and other valuables. Without counting treasures like $26 million in gifts and property given to Bankman-Fried’s parents or the $700 million given to K5 Global and founder Michael Kives, who put FTX funds in businesses like SpaceX, his team has already amassed more than $7 billion. The value of some of those investments has increased dramatically.

Attorneys for the bankruptcy estate stated to a Delaware judge last month that they anticipate paying back consumers and creditors who have valid claims in full.

Andrew Dietderich, a bankruptcy attorney who works with FTX’s new leadership team, said, “There is still a great deal of work and risk” ahead in getting all the money back to clients, but that the team has a “strategy to achieve it.”

FTX had been in talks with potential buyers over a possible corporate relaunch, but those talks were called off in January.

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