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FTX Bankruptcy: Exchange Can Sell $1 Billion Worth of Anthropic Shares, Court Rules

Last Updated February 23, 2024 10:05 AM
James Morales
Last Updated February 23, 2024 10:05 AM
By James Morales
Verified by Peter Henn

Key Takeaways

  • A judge has ruled that FTX can sell its stake in AI startup Anthropic.
  • Since FTX invested in the AI startup in 2021, Anthropic’s valuation has ballooned.
  • Today, FTX’s shares could be worth nearly triple the $500 million it originally invested.

When FTX invested in AI startup Anthropic in 2021, it paid $500 million for a 13.6% stake in the company. At the time, it was worth around $3.6 billion. Since then, however, Anthropic’s valuation has ballooned to more than $18 billion after its latest funding round.

Now, after a judge ruled that FTX could sell its Anthropic shares on Thursday, February 23, the company’s creditors could benefit from a significant windfall from the sale.

FTX’s Big Bet on AI

At the time of FTX’s initial investment, large language models (LLMs) were generating significant interest. However, OpenAI had not yet released ChatGPT, which propelled the technology to international fame. 

Before branching out on their own, Anthropic’s founders worked on GPT models at OpenAI, leaving following disagreements over the company’s direction. Since then, Anthropic has emerged as one of the preeminent LLM developers, attracting the attention of tech giants like Amazon and Google.

The firm’s answer to ChatGPT – Claude – is aimed more at business users than OpenAI’s model, which is pitched as a general-purpose AI assistant suitable for a variety of applications.

For example, Amazon has integrated Claude into its Bedrock AI cloud platform, where users can deploy the LLM to build customized generative AI applications.

Anthropic’s Fundraising Frenzy

Nearly three years since FTX invested in Anthropic, the company has gone on to secure billions of dollars of additional funding. As a result, it is now one of the most valuable AI startups in the world.

In September 2023, the company secured a $4 billion investment from Amazon. Shortly after, Google provided Anthropic with an additional $2 billion.

A Windfall for FTX Creditors

In total, FTX is thought to owe creditors around $9 billion. 

So far, efforts to claw back funds have focused on liquidating the bankrupt exchange’s cryptocurrency holdings. But now, proceeds from the sale of its Anthropic stake will also contribute a significant portion of the final repayment package.

In January, the venture capital firm Menlo Ventures reportedly  closed a deal to invest $750 million in Anthropic at an $18.4 billion valuation.

Since 2021, FTX’s share in the startup has fallen to 7.84%. Nevertheless, that still suggests the investment could be worth more than $1.4 billion today.

Under the latest ruling, however, as much as a third of the money raised by selling Anthropic shares could go to non-customer creditors. However, some customers have argued that they should be entitled to 100% of the proceeds from the sale. This is because, they claim, customer assets were used to fund FTX’s initial investment.

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