Anthropic and the new rules for negotiating agreements with AI
Coming up with innovations in artificial intelligence is hard work. So is raising the seemingly infinite amounts of capital needed to finance it, as illustrated by startups like Anthropic.
To finance the Increasing levels of computing power needed For AI operations, Anthropic has raised more than $7 billion from tech giants like Amazon and Google, as well as investors led by venture capital firm Menlo Ventures.
But hoarding that money has forced Anthropic, along with rivals like OpenAI and Cohere, to be more creative in your fundraisingReport by Erin Griffith and Cade Metz of the Times:
In one such deal, Anthropic agreed to use technology such as chips and cloud computing services from companies that invested in it. That meant, in effect, that some of the money raised would be returned to its investors. And to consolidate the smaller investors who were interested in Anthropic, Menlo created a legal entity known as a “special purpose vehicle.”
“These deals are very complicated,” said Dave Brown, a vice president at Amazon Web Services who was involved in Amazon’s deal with Anthropic.
Despite AI’s promise to transform every aspect of society, it has begun by disrupting startup arrangements in Silicon Valley. Young companies typically raise money approximately every 15 months, after demonstrating that their businesses have grown. But since generative AI, which can generate text, images, sounds and videos, burst onto the scene in late 2022, the rulebook has been thrown out as investors fight for a share of the most popular developers.
That deal has been under the spotlight of the FTC, which is reviewing Anthropic’s investments for potential antitrust violations. Anthropic told The Times it planned to cooperate with the regulator, while Amazon and Google said investments and cloud credit deals were made at arm’s length.
-
In other AI news: Google DeepMind director Demis Hassabis told Wired that the future of the technology won’t necessarily revolve around increasingly larger products.
Next week
The Fed, earnings and artificial intelligence will be in the spotlight this week. Here’s what you should keep in mind.
Wednesday: The Federal Reserve will release minutes from its January rate-setting meeting, giving investors new clues about its timeline for lowering interest rates. Higher-than-expected inflation data last week has forced traders to reduce their bets on imminent cuts.
