By
Bhushan Akolkar
April 26th, 2024
Bankrupt crypto exchange FTX sold most of its stake in AI firm Anthropic for $884 million to repay creditors.
The saga of the bankrupt crypto exchange FTX estate continues with selling the majority of its stake in Artificial Intelligence (AI) startup Anthropic after reaching a deal with dozens of institutional buyers, including Wall Street majors like Jane Street and funds managed by Fidelity.
Court filings reveal FTX reached a deal to sell two-thirds of its Anthropic holdings for $884 million. The equity valuation surpasses twice the amount at which former FTX Chief Executive Officer Sam Bankman-Fried had initially procured this equity interest.
Although Sam Bankman-Fried invested $500 million to acquire an 8% stake in Anthropic through FTX’s subsidiary Clifton Bay in 2021, the overall valuation of FTX’s holdings in the firm now exceeds $1 billion – a substantial increase within a relatively short timeframe.
The Anthropic company, known for its research in safe and interpretable artificial intelligence, secured substantial investments the last year – a staggering $4 billion from Amazon and an additional $2 billion from Google.
FTX Stake in Anthropic Attracts Diverse Investors
Holdings from FTX’s stake in Anthropic will primarily be acquired by a Mubadala-aligned entity, ATIC Third International Investment Co, procuring approximately $500 million worth of shares. This shows the considerable interest in this cutting-edge AI company from a prominent sovereign wealth fund.
The firm Jane Street, a former workplace of key figures from FTX and Alameda Research, emerges as the second-largest buyer, acquiring nearly $100 million in shares. Moreover, Craig Falls, the firm’s quantitative research head, has opted for a personal stake by purchasing $20 million worth of shares, further underscoring Jane Street’s confidence in the venture.
Fidelity Investments’ funds collectively acquire $44 million of FTX’s stake in Anthropic, a significant investment highlighting the firm’s interest. Additionally, venture capital firm HOF Capital and the renowned Ford Foundation emerge as notable buyers, further underscoring the venture’s appeal to diverse investors.
Anthropic Sale Signals Recovery Path for FTX
The bankruptcy proceedings of FTX witnessed a notable event when Judge John Dorsey approved the proposed divestment of FTX’s shareholding in Anthropic, an artificial intelligence research company. Significantly, the bankruptcy estate intends to direct the proceeds from the sale towards creditor recoveries.
The FTX estate’s cash holdings, presently standing at $6.4 billion, are expected to see a significant boost with this sale. This could potentially facilitate the complete reimbursement of creditors, a favorable outcome for those adversely impacted by FTX’s dissolution.
For Anthropic, gaining new investors signifies sustained backing for its research efforts and advancements. The firm’s focus on responsible AI development aligns with escalating apprehensions within the domain, potentially positioning it as a forerunner in crafting secure and advantageous artificial intelligence solutions.