Bankers go bonkers as FTX dangles 8% stake in hot AI startup Anthropic

Bankers are actively seeking buyers for FTX’s 8% stake in Anthropic, an AI startup, as reported recently. FTX acquired the 8% stake in Anthropic three years ago for $500 million. However, due to the recent surge in the AI sector, the stake’s value has more than doubled to over $1 billion.

FTX’s Anthropic stake – Who wants the share?

The FTX estate received approval from a New York bankruptcy court to proceed with the sale of the shares in February. A previous attempt to sell the shares in June 2023 ended up falling through after months of due diligence came to a halt.

This artificial intelligence company competes with OpenAI and other similar companies. Former CEO Sam Bankman-Fried made a substantial $500 million investment in the company through Alameda and FTX, which resulted in the estate’s stake reaching approximately 8%.

Last December, Anthropic aimed to raise $750 million, which would have valued the company at approximately $18 billion. Based on those figures, the investment would have a value of approximately $1.4 billion.

According to a court document from Feb, the Debtors have highlighted the importance of having the flexibility to sell their Anthropic Shares at different times and through various means in order to monetize their interest.

As per a report from CNBC, which relied on undisclosed sources, Anthropic is actively seeking a buyer to acquire a portion of the company’s ownership. However, they have made it clear that they are not considering investors from Saudi Arabia as potential buyers.

As stated in the report, the sale is anticipated to conclude within the coming weeks, with the proceeds being utilized to reimburse FTX investors.

In January, lawyers representing FTX stated that the bankrupt exchange plans to fully reimburse customers for their holdings’ value. Disgraced founder and former CEO Sam Bankman-Fried has been leveraging this fact to argue for a much shorter sentence than the 40-50 years proposed by federal prosecutors.

National security concerns

Despite Saudi Arabia’s ambitious efforts to diversify its investments through Crown Prince Mohammed bin Salman’s “Vision 2030 Initiative,” the country has been prohibited from investing in Anthropic.

As per the report, Anthropic founders Dario and Daniela Amodei, who have connections to FTX founder and former CEO Sam Bankman-Fried through the effective altruism community, advised bankers against selling the stake to Saudi Arabia. Both parties have limited involvement in the discussions, but they still have the authority to evaluate potential investors.

Anthropic’s decision is said to be influenced by factors related to national security and geopolitical complexities. These factors include Saudi Arabia’s relations with China and its controversial human rights record, which has been brought to attention through incidents like the alleged assassination of journalist Jamal Khashoggi in 2018.

The AI firm may have concerns about selling the shares to Saudi Arabia due to the fact that AI is seen as a technology with potential risks in both civilian and military applications.

Nevertheless, the company has made no effort to prevent other countries from joining the sale, as the UAE’s Mubadala remains a contender. In recent weeks, the US government has expressed concerns regarding the sensitive nature of AI and its potential impact on national security.

The Committee on Foreign Investment in the United States (CFIUS) has the authority to block foreign investments that are considered a potential risk to national security. They may also choose to intervene in the sale process due to the increased interest from foreign state-backed entities.