Artificial intelligence Startups

Google Invests $300M In Anthropic As Tech’s AI Arms Race Heats Up

Illustration of a robot holding a gold coin.

Earlier this week, news broke that San Francisco-based AI startup and rival to ChatGPT Anthropic was raising a $300 million round.

On Friday it was revealed the investor offering up the money would be none other than tech titan Google — obviously not willing to stand idly by and let Microsoft win the battle for AI supremacy.

The news was first reported by the Financial Times.

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The deal — which gives Google a 10% stake in the company — comes just weeks after news broke of Microsoft’s massive investment in OpenAI.

Anthropic’s AI chatbot, Claude, is in closed beta mode, but in a paper detailing its goals, it is expected to combat harmful prompts by explaining why they are dangerous or misguided.

This is not Google’s and its parent Alphabet’s first foray into AI. In 2015 Alphabet bought DeepMind, a London-based AI startup founded in 2010, and is building an NLP model similar to ChatGPT.

AI dominance

The new year is shaping up to be an all-out AI war. Late last month, Microsoft finally confirmed it has agreed to a “multiyear, multibillion-dollar investment” into OpenAI, the startup behind the artificial intelligence tools ChatGPT and DALL-E for a reported $10 billion. 

Per Crunchbase data, funding in the AI space has accounted for around 10% of all venture funding in recent years. Even last year, as venture dried up, AI flourished in its second-best funding year ever

Just this week, it was reported by The Information that an AI startup co-founded by a pair of entrepreneurs who had left Adept AI recently raised $8 million. And Perplexity AI, which is developing a search engine that lets people ask questions through a chatbot, is looking to raise a $15 million seed round. 

Anthropic’s new round could bring the company’s total valuation to $5 billion, The New York Times reported. The startup previously raised $704 million across Series A and Series B funding rounds in 2022, according to Crunchbase data.

Illustration: Dom Guzman

Clarification: This story has changed since its original publication to clarify terms of the deal.

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