While the vendor's valuation is still far away from OpenAI's, investors still have confidence in the vendor -- especially as it focuses on enterprise safety and coding.
AI foundation model provider Anthropic nearly tripled its valuation in the last few months, a sign of the continued interest in the vendor as it competes with OpenAI.
On Tuesday, Anthropic revealed it completed a $13 billion Series F fundraising led by ICONIQ Capital, with participation from other investors, including Fidelity Management and Research Co., General Catalyst, Insight Partners and WCM Investment Management.
The $13 billion fundraise brings the vendor's valuation to $183 billion. It is almost three times Anthropic's valuation in March, after the company raised $3.5 billion and had a valuation of $61.5 billion.
The $183B valuation still falls short of competitor OpenAI's current value, which is about $500 billion.
Despite the gap between its valuation and OpenAI's, what Anthropic has done is still impressive, said David Menninger, an analyst at Information Services Group.
"Tripling their valuation is significant, and clearly quintupling their revenue run rate during the year is a pretty significant indication that they're doing pretty well in the market," Menninger said.
The investment also shows that Anthropic still has a lot of supporters in the investment community, said Nick Patience, an analyst at The Futurum Group.
It's certainly still got a lot of appeal amongst investors.
Nick PatienceAnalyst, The Futurum Group
"It's certainly still got a lot of appeal amongst investors," Patience said.
Anthropic has also positioned itself as a vendor that enterprises can trust, with a focus on coding.
"From our research, we know that governance, compliance and risk are all big concerns around organizations' AI initiatives. Anthropic seems to pay more attention to those areas than others," Menninger said. "They're all investing in guardrails and safety mechanisms, but Anthropic, perhaps, embraced that approach earlier than others."
Need to generate revenue
However, embracing safety and focusing on coding alone will not help Anthropic gain headway against OpenAI and other competitors in the AI race.
"They are going to use this for compute," Patience said. "They're also going to use it to expand into other product areas, expanding geographically."
While Anthropic is growing, it and other vendors continue to face the challenge of creating revenue so that investors can see an ROI.
"All these companies have to find a way to make money eventually," Menninger said.
Part of the problem is that while model providers like Anthropic are generating income (Anthropic has increased its annual run rate from $1 billion in January to more than $5 billion in August), they also seem to be spending a lot more.
"They are generating a lot of revenue [and] obviously losing a lot of money in the process," Patience said. "I don't think we're in any danger of slowing down at the moment, but ... investors are going to want a return at some point."
Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems.
