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FTX estate divests huge share in AI firm Anthropic for $884 million, most of proceeds headed to UAE

ByYasmeeta Oon

Mar 31, 2024
FTX estate divests major share in AI firm Anthropic for $884 million, most of proceeds headed to UAE

In a significant move marked by its bankruptcy turmoil, FTX, the embattled cryptocurrency exchange, has entered into agreements to divest its majority stake in the artificial intelligence innovator Anthropic. This deal, which could amount to $884 million, was unveiled in a recent court filing to the Delaware jurisdiction overseeing FTX’s bankruptcy case.

Anthropic, a beacon in the AI industry, has attracted a consortium of strategic investors, reflecting a keen interest in its pioneering technologies. The deal, dated March 22, outlines a diversified group of purchasers, highlighting the global appeal of cutting-edge AI enterprises.

At the forefront of this investment surge is ATIC Third International Investment Co., closely linked with Mubadala, the United Arab Emirates’ sovereign wealth fund. This group is set to acquire shares approximating $500 million, indicating a robust confidence in Anthropic’s potential.

Notably, this transaction saw a competitive interest from multiple sovereign wealth funds, underscoring the high stakes in the rapidly evolving tech landscape. However, certain geopolitical sensitivities led to exclusions, with Saudi Arabia reportedly being sidelined due to national security considerations. This move reflects the intricate interplay between technology investments and geopolitical strategies, especially in a region keen on diversifying its economic base beyond oil.

  • ATIC Third International Investment Co.: Leading the investment with nearly $500 million in shares.
  • Jane Street: The quantitative trading powerhouse, marking a $100 million stake, with an additional personal investment of $20 million by Craig Falls, the firm’s head of quantitative research.
  • Other Notable Investors: Including HOF Capital, the Ford Foundation, and funds managed by Fidelity Management among the nearly two dozen buyers.
InvestorInvestment Amount ($)
ATIC Third International Investment Co.500 million
Jane Street100 million
Craig Falls (Personal Investment)20 million
HOF CapitalN/A
Ford FoundationN/A
Fidelity Management FundsN/A

This strategic divestment is pending approval from Judge John Dorsey, who presides over FTX’s bankruptcy case. The successful completion of this sale would represent a substantial portion of FTX’s investments in Anthropic, signifying a critical step in the company’s efforts to settle debts with its creditors.

FTX’s journey into bankruptcy has been tumultuous, with founder Sam Bankman-Fried facing a conviction on seven criminal counts related to the exchange’s collapse. With a recommended sentence stretching between 40 to 50 years, the saga highlights significant risks in the crypto market.

Under Bankman-Fried, FTX had ventured significantly into the AI sector, investing $500 million in Anthropic. Founded by former OpenAI employees in 2021, Anthropic’s valuation soared to $18 billion by December 2023, showcasing the explosive interest in generative AI technologies.

Since declaring bankruptcy, FTX, under the leadership of John Ray III, has been aggressively pursuing asset recovery, including cash, luxury properties, and cryptocurrencies. The team’s efforts have amassed over $7 billion, a testament to their commitment to repaying affected clients and creditors.

  • Over $7 billion recovered, excluding significant valuables and investments.
  • Expectations to fully repay customers and creditors with legitimate claims.
  • Continued exploration of strategic options, including asset divestments.

While the sale of the Anthropic stake is a crucial development, it’s part of a broader strategy aimed at navigating FTX through its bankruptcy ordeal. The decision to divest reflects a pragmatic approach to asset management, ensuring that investments are liquidated in a manner that maximizes returns for creditors and stakeholders.

FTX’s efforts to reboot the company were eventually shelved, focusing instead on optimizing asset recovery. This strategic pivot underscores the complexities involved in managing a bankruptcy of this magnitude, particularly in the volatile domains of cryptocurrency and technology investments.

  • Asset Recovery: Continued emphasis on liquidating valuable assets to repay creditors.
  • Strategic Divestments: Prudent management of investment stakes to ensure optimal recovery.
  • Legal Proceedings: Navigating the intricacies of bankruptcy law to achieve a favorable outcome for all parties involved.

FTX’s sale of its stake in Anthropic marks a pivotal moment in the cryptocurrency exchange’s bankruptcy journey. This strategic divestment not only underscores the intrinsic value found within AI technologies but also highlights the global investment interest in such innovations.

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Featured Image courtesy of Crypto Daily

Yasmeeta Oon

Just a girl trying to break into the world of journalism, constantly on the hunt for the next big story to share.

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