Artificial intelligence

OpenAI Rival Anthropic Expected To Nab $300M

Illustration of robot nesting doll. [Dom Guzman]

In 2021, veterans of ChatGPT’s parent OpenAI founded a new AI startup that would quickly rival the company.

Anthropic, the San Francisco-based AI startup and rival to ChatGPT, is close to adding $300 million to its dry powder, The New York Times reported.

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That could bring the company’s total valuation to $5 billion. Anthropic previously raised $704 million across Series A and Series B funding rounds in 2022, according to Crunchbase data (much of that Series B was bankrolled by Sam Bankman-Fried, the disgraced FTX founder).

The AI arms race

Anthropic and its AI chatbot, Claude, are riding on the coattails of Silicon Valley’s latest obsession with AI that started in November, when OpenAI launched the new and improved ChatGPT.

Anthropic aims to do the same. The chatbot is in closed beta mode, but in a paper detailing its goals, Claude is expected to combat harmful prompts by explaining why they are dangerous or misguided.

Per Crunchbase data, funding in the AI space has accounted for around 10% of all venture funding in recent years. While several industries buckled amid the funding dry spell in 2022, AI flourished in its second best funding year ever. Funding in startups that used AI-related descriptors far outpaced those with Web3 descriptors, which was once the apple of Silicon Valley’s eye.

Cohere, a Canada-based natural language processing startup that was founded in 2019, has raised around $170 million in two series. DeepMind, a London-based AI startup that was founded in 2010, was acquired by Alphabet in 2015 and is building an NLP model similar to ChatGPT.

As investors scramble to grab a piece of sophisticated, AI-powered language processing models, OpenAI is making strategic moves to ensure it’s adopted before the competition. The Information recently reported that OpenAI is investing in startups, particularly those that will use its language processing networks.

Illustration: Dom Guzman

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