Which investors will get rich from Antropic’s IPO?
As artificial intelligence companies Anthropic and OpenAI prepare to go public, the question around Silicon Valley is which investors will win the big bucks.
It turns out that the answer is for just about everyone.
At least 95 investors have put money into both Anthropic and OpenAI, according to statistics on PitchBook, which tracks private investments. Sequoia Capital, a venture capital firm, invested in both start-ups. So are Founders Fund, Coatue Management and Altimeter Capital Management.
This is very unusual. In the past, venture capital firms that invest in young start-ups have typically backed just one company in a fast-growing new technology category. Putting money into direct competitors was considered a conflict of interest.
But the AI boom has changed almost everything around Silicon Valley, and the way investors nurture startups is no exception. The top firms on Sand Hill Road — a famous stretch in Menlo Park, Calif., that remains a nexus for venture capital firms — have changed their norms and adjusted their strategies to avoid missing out on investments in artificial intelligence companies that could be the next $2 trillion winner.
Few large investment funds want to say, “We miss both OpenAI and Anthropic,” said Karan Mehandru, an investor at Madrona Venture Group.
How much of Silicon Valley is tied to the success or failure of Anthropic and OpenAI is evident in the amount of money these two private companies have amassed.
Anthropic has raised more than $130 billion from about 300 investors, according to PitchBook, including venture capital firms, hedge funds, major technology companies and Middle Eastern sovereign wealth funds. OpenAI has raised more than $180 billion from about 230 investors, such as major technology companies and Joshua Kushner’s investment firm, Thrive Capital.
In contrast, Facebook (before it became Meta) raised just $2.4 billion before going public in 2012, and Uber raised roughly $20 billion before going public in 2019.
Not all of the investors PitchBook named as Anthropic and OpenAI shareholders obtained their shares through traditional venture funding rounds; the list includes some who bought indirectly through private sales of shares in the “secondary market”, meaning investors acquire shares from existing shareholders such as employees or early investors.
SpaceX’s successful $1.7 trillion initial public offering in June further fueled investor enthusiasm for Anthropic and OpenAI. Anthropic is headed for an initial public offering this year that could value it at $2 trillion and become the largest ever. OpenAI may go public next year, and its offering is also expected to be huge.
For investors, that means “all the numbers are bigger, including the entry price and the exit price,” said Sohail Prasad, chief executive of Destiny100, which bought shares of OpenAI and Anthropic in the secondary market.
Anthropic and OpenAI declined to comment. (The New York Times has sued OpenAI and Microsoft, alleging copyright infringement of news content related to AI systems. Both companies have denied the claims.)
For years, venture capitalists followed similar rules. Their idea was to take a large stake in the young company and help it with advice. The investor would sit on the board of the start-up.
When Facebook went public, venture firm Accel Partners owned 11.4 percent of the company’s stock. Jim Breyer, a partner at the firm, sat on Facebook’s board alongside Marc Andreessen and Peter Thiel, two other venture capitalists.
And when Uber went public, venture firm Benchmark Capital Partners owned 11 percent of the company. One of Benchmark’s investors, Matt Cohler, sat on the board.
But Anthropic, which was created five years ago, looks completely different. That’s partly because venture firms initially dismissed the company as a science project. More than 20 companies rejected the start-up’s offer, Anjney Midha, an anthropic investor, he said in a recent podcast. Instead, people in Effective Altruism circles, a philanthropic movement that prioritizes data and analytics for social causes, first invested in Anthropic.
Spark Capital, a Silicon Valley venture capital firm, ended up leading a funding round in Anthropic in 2023. Spark Capital investor Yasmin Razavi has joined Anthropic’s board of directors.
Around that time, Dario Amodei, CEO of Anthropic, and Neerav Kingsland, CEO of Anthropic, visited the home Guy Oseary, a Hollywood talent manager who invests in technology through his firm Sound Ventures. Mr. Oseary was impressed by Anthropic’s pitch, said a person familiar with the matter who, like others interviewed for this article, spoke on condition of anonymity because the discussions were private. But Sound Ventures has already invested in OpenAI.
So the firm got permission from Sam Altman, CEO of OpenAI, and Dr. Amodeia to invest in both companies, a person familiar with the matter said. This made Sound Ventures one of the first firms to put money into both competitors.
Soon after, Mr. Oseary launched a new fund dedicated to AI “We believed it would be the most important technology of our lifetime,” he said in a statement.
As Anthropic and OpenAI grew, their need for capital outpaced the support of many venture firms that weren’t set up to write such large checks. Menlo Ventures, a Silicon Valley firm known for backing Uber, proposed a solution. To further invest in Anthropic, the firm created a “special purpose vehicle” in 2024, a fund that pooled many small investors into one $750 million entity controlled by Menlo.
Thrive Capital created a similar vehicle to invest in OpenAI in 2024.
Google, Amazon, Microsoft and Nvidia have also taken stakes in Anthropic and OpenAI, signing large contracts to provide cloud computing services or chips. Some of these giants are now the largest shareholders of start-ups.
Lightspeed Venture Partners and Iconiq Capital, two major investment firms in Silicon Valley, later led funding rounds in Anthropic. Menlo, Lightspeed and Iconiq now own between 1 percent and 2 percent in Anthropic, three people familiar with the investment said. The financial security ranks them among the largest external investors of the AI start-up. (Menlo and Lightspeed do not own shares in OpenAI; Iconiq has a small stake in it.)
Venture capital firms typically aim to own more than 1 percent or 2 percent of a startup, but the potential for Anthropic to go public at a $2 trillion valuation means investors could still see an enormous windfall. Spark Capital’s Ms. Razavi is the only investor with a seat on Anthropic’s board.
After Anthropic’s coding and trading automation tools emerged last year, investing in the company became a “consensus,” a term VCs use to describe an industry-wide success. Investors around the world scrambled to snap up the stock, despite a lack of detailed information on company performance or board seats.
Sequoia Capital previously declined to invest in Anthropic, in part because it backed Elon Musk. xAIcompetitor and was also a significant investor in OpenAI, a person familiar with the firm said. But Sequoia Capital has participated in two funding rounds for Anthropic this year, including co-leading one in May that valued the company at $900 billion.
Other investment firms acquired shares of Anthropic and OpenAI when AI companies bought smaller firms with shares. Anthropic has acquired at least four companies, and OpenAI has acquired roughly a dozen, according to PitchBook.
Madrona acquired shares of OpenAI last year after the San Francisco company bought Statsig, a provider of artificial intelligence software, for $1.1 billion. Madrona owned part of Statsig, which meant that its shares were converted into OpenAI shares.
Statsig was doing well, Mr Mehandru said, but his firm was happy to exchange those shares for OpenAI shares. “If it was in stock from someone else,” he said, “maybe the answer would be different.”
In February, Madrona also acquired a stake in Anthropic when the AI startup acquired Vercept, a company that makes agents that can remotely control computers. Madrona was an investor in Vercept.