According to reports from CNBC, AI startup Anthropic has decided not to accept investments from Saudi Arabia in the sale process of 8% of its shares as part of FTX’s bankruptcy proceedings. The executives of Anthropic have cited concerns as the reason for excluding Saudi Arabian involvement.

The stake in Anthropic was acquired by FTX CEO Sam Bankman-Fried three years ago for $500 million. Due to the recent surge of interest in AI technologies, the value of the 8% stake has now exceeded $1 billion.

The proceeds from the sale of the stake will be used to repay FTX customers, and the transaction is expected to be concluded within the next few weeks, as per anonymous insiders familiar with the negotiations.

Sources indicate that Anthropic’s class B shares, which do not grant voting rights, are being sold based on the company’s most recent valuation of $18.4 billion.

In recent years, Anthropic has raised approximately $7 billion from major tech giants such as Amazon, Alphabet, and Salesforce. The company’s advanced language model competes directly with OpenAI’s ChatGPT.

While founders Dario and Daniela Amodei retain the right to challenge potential investors, they are currently not involved in the fundraising process or discussions related to FTX’s stake. The Amodei siblings were introduced to Bankman-Fried through the concept of “effective altruism,” which focuses on maximizing wealth for charitable causes.

UAE Contemplates Potential Investment in Anthropic

Anthropic, the AI startup, has made it clear that it will not accept investments from Saudi Arabia during the sale process of 8% of its shares as part of FTX’s bankruptcy proceedings. However, the company does not have reservations about funding from other sovereign wealth funds, including the United Arab Emirates’ Mubadala. Reports suggest that Mubadala is actively considering investing in Anthropic.

The potential buyers for FTX’s shares consist of a syndicate of new investors for Anthropic, excluding major players like Amazon and Alphabet. The sale of FTX’s stake is being facilitated through special purpose vehicles (SPVs), allowing multiple investors to pool their capital. Venture firms have reportedly received emails from SPVs inviting them to participate in the sale, according to sources familiar with the matter.

Perella Weinberg, an investment bank, is overseeing the sale process on behalf of FTX.

Saudi Arabia’s Sovereign Wealth Fund Makes Tech Investment Move

PIF, Saudi Arabia’s sovereign wealth fund, has been actively investing in technology to diversify the country’s revenue sources away from oil. With assets exceeding $900 billion, PIF is reportedly in discussions with venture firm Andreessen Horowitz to create a dedicated $40 billion fund for AI investments, according to sources cited by CNBC.

The investments made by PIF align with Saudi Crown Prince Mohammed bin Salman’s “Vision 2030 Initiative,” which aims to modernize the economy and strengthen global financial ties. PIF has made notable investments in companies such as Uber and has also provided funding for initiatives like the LIV golf league, along with significant commitments to professional soccer and tennis.

Concerns raised by Anthropic regarding national security and Saudi Arabia may be related to dual-use technology, which encompasses software or tech that can have both civilian and military applications. This particular concern aligns with the focus of the Committee on Foreign Investment in the United States (CFIUS), which possesses the authority to block foreign investments from specific sources in certain sectors. It is important to note that Saudi Arabia has been cultivating closer ties with China as well.

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

 

By ailf

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