Sequoia Capital is lining up a big investment into Anthropic, throwing its weight behind the AI start-up for the first time as part of a funding round set to raise tens of billions of dollars.
The Californian venture capital group is joining a funding round led by Singaporean sovereign wealth fund GIC and US investor Coatue, which are contributing $1.5bn each, according to multiple people with direct knowledge of the deal.
These people said Anthropic is aiming to raise $25bn or more in total in a deal that values the company at $350bn, more than doubling its $170bn valuation just four months ago. Tech giants Microsoft and Nvidia have committed to invest up to $15bn in total into the company, with venture capitalists and other investors contributing another $10bn or more, they added.
The funding discussions remain live and the final figure could change, said two of the people. Anthropic is yet to decide which investors to admit to the funding round, they added, but the new funding round is expected to close in the next few weeks.
Sequoia’s proposed investment comes after a shake-up of its senior ranks late last year.
Roelof Botha, in charge as Sequoia passed on previous funding rounds for Anthropic, was wary of the concentration of VC investment into a handful of highly valued start-ups.
Arguing that venture capital was not an asset class, he said in an interview last year that: “Throwing more money into Silicon Valley doesn’t yield more great companies.”
Botha was ousted in November, with the firm’s partners electing Pat Grady and Alfred Lin to co-lead the firm instead.
Sequoia was an early investor in Google, Apple, Airbnb and Stripe — and has backed some of Anthropic’s biggest rivals. Sequoia invested in OpenAI’s funding round last year, and in Elon Musk’s AI group xAI.
Venture capital firms rarely back rival start-ups in the same field, preferring to pick winners in each category. But the scale of the financial opportunity in AI has changed that approach, according to a person familiar with Sequoia’s thinking.
“This [Anthropic deal] is a round where the company is so big that it’s gone from a VC investment to a stock investment,” they said. “[Sequoia] own a tonne of both OpenAI and xAI and are very bullish on the idea that this is not a race to be won, but that they will each have their own capabilities.”
The company makes the Claude chatbot and has carved out a lucrative niche building AI tools for software engineers.
The latest funding round follows a period of rapid growth at the start-up, with revenues increasing from $1bn on an annualised basis a year ago, to roughly 10 times that today.
Bloomberg has reported some of the details of the round.
Anthropic is gearing up for an IPO which could come as soon as this year. The company has hired the law firm Wilson Sonsini to begin preparatory work and held preliminary conversations with banks about a public listing.
OpenAI, as well as Musk’s rocket company SpaceX, are also laying the groundwork for public offerings which would rank among the largest of all time.
Sequoia, GIC, Coatue and Anthropic declined to comment.