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FTX Benefits From AI Surge: $452M from Anthropic Share Sale

Last Updated June 3, 2024 2:24 PM
Teuta Franjkovic
Last Updated June 3, 2024 2:24 PM

Key Takeaways

  • FTX offloaded all remaining Anthropic shares for $452 million.
  • G Squared, a VC firm, snagged 4.5 million shares for $135 million.
  • Creditor Relief: Funds will help repay creditors of the bankrupt crypto exchange.

The FTX estate has sold off its remaining shares in Anthropic, the AI company behind the Claude chatbot.

Recent bankruptcy documents  reveal that the FTX estate disposed of 15 million shares in Anthropic at a price of $30 per share, generating more than $452 million.

G Squared Snags $135M Stake in Anthropic as FTX Liquidates Assets

Court filings  reveal that G Squared, a venture capital fund manager, was the primary purchaser in the latest round of asset liquidation by the FTX estate, securing 4.5 million shares of Anthropic for approximately $135 million.

The sale also attracted significant interest from other investment entities, including Fund FG-BLU and an array of hedge funds and investment firms.

This transaction follows a previous sale two months earlier, where FTX liquidated a large block of its holdings in Anthropic at the same price of $30 per share, predominantly to investors based in Abu Dhabi.

The earlier deal  generated about $900 million, culminating in a total of approximately $1.3 billion from both sales combined.

One of the key participants in the initial transaction was ATIC Third International Investment Company LLC,  a company linked to the UAE’s sovereign wealth fund Mubadala, which purchased nearly $500 million in shares from FTX’s stake in Anthropic.

This transaction , similar to the recent one, was disclosed in documents filed with the U.S. Bankruptcy Court for the District of Delaware.

FTX Sees Hope in Repaying Creditors as AI Investment Pays Off

FTX officials are hopeful about their ability to repay creditors, bolstered by the estate’s substantial cash reserves, which were last reported at approximately $6.4 billion. A significant contributor to these reserves has been the sale of Anthropic shares, previously one of the most valuable assets in FTX’s portfolio. In 2021, the now-defunct crypto exchange Alameda Research, also founded by Sam Bankman-Fried, invested $500 million for an 8% stake in Anthropic.

Before establishing FTX, Bankman-Fried created Alameda Research, a trading firm that conducted billions of dollars in transactions using FTX accounts and utilized the exchange’s native token for collateral. Both Alameda and FTX declared bankruptcy in November 2022, and Bankman-Fried was later sentenced to 25 years in prison.

The value of the Anthropic shares surged as the AI sector experienced rapid growth, ultimately generating over $800 million in profits for the bankrupt exchange. This increase significantly contributed to the estate’s capability to manage creditor repayments more effectively.

FTX Creditor Repayment Plans

Anthropic’s market value soared following a substantial investment from Google in late 2022. Google injected approximately $300 million into the AI firm, aiming to strengthen its position in the fiercely competitive artificial intelligence sector against rivals like Microsoft and OpenAI.

The liquidity event  for the shares came after the US Bankruptcy Court on February 22 approved FTX’s request to divest its holdings in Anthropic, by which time the value of these shares had more than doubled since the initial investment. This development is a significant milestone in the bankrupt exchange’s strategy to repay its creditors.

Sam Bankman-Fried initially secured a nearly 14% stake in Anthropic back in 2021. However, subsequent capital raises by the AI company diluted FTX’s share to 7.84%. While the sale did face some resistance from FTX customers—who contended the shares were bought with misappropriated funds—a consensus was reached to proceed with the divestment under the condition that the proceeds could be subject to claims at a later date.

An initial attempt to sell the Anthropic shares in June 2023 was stalled, but the successful recent transactions represent a crucial move towards addressing FTX’s financial responsibilities. As these efforts continue, former customers and investors are keenly observing, hopeful that the funds raised will be instrumental in settling the exchange’s debts and facilitating its navigation through bankruptcy proceedings.

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