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    Anthropic, OpenAI’s Competitor, Secures $2 Billion with Google and Other Backers

    With the massive fundraising, Anthropic will focus on significant development of Claude Next and increase spending to improve its AI model.

    A week after raising $1.25 billion from tech giant Amazon, competing OpenAI company Anthropic has chosen Google and others to raise an additional $2 billion in new funding. Google already took a 10% stake in Anthropic last year in 2022. Sources familiar with the matter said Google plans to increase its stake further.

    The two-year-old startup, known for its chatbot Claude, a competitor to OpenAI’s ChatGPT, is seeking a valuation between $20 billion and $30 billion with the new investment, according to a source familiar with the matter.

    This valuation represents a fivefold increase from March when investors valued the company at $4 billion. It is pricing its stock at a significantly higher price compared to OpenAI in terms of revenue multiple valuation, The Information reported.

    Anthropic, a startup founded two years ago, deals with the creation of generative AI models, positioning itself as a competitor to OpenAI. Its primary offering is Claude 2, a chatbot with functions similar to ChatGPT. Claude 2 can design marketing content, solve math problems and engage in meaningful conversations with people.

    Nevertheless, Anthropic has big ambitions for an even more potent model called Claude Next. This model is extremely resource intensive, to the extent that even the world’s most advanced supercomputers would struggle to support it. Consequently, the company is actively seeking significant capital to advance its development.

    Anthropic focusing on Claude Pro

    Anthropic pointed to the substantial costs associated with running its AI models as the primary driver behind the introduction of a paid subscription service called Claude Pro. This service allows users to send more messages and enjoy priority access during peak usage periods.

    The financial demands of AI are considerable. Earlier this year, OpenAI made headlines for allegedly spending a whopping $21 million each month on cloud-based graphics processing units and other computing resources needed to run ChatGPT.

    In pursuit of its ambitious goal of creating an even more robust generative AI model, Anthropic has been actively seeking funding from various investors this year. In addition to Amazon, SK Telecom Co. Ltd. also backed the startup with a $100 million investment in August. In March, Anthropic successfully closed a significant funding round of $450 million, with contributions from major players such as Google, Salesforce Ventures, and Zoom Ventures.

    Documents leaked earlier this year revealed Anthropic’s aspirations to raise up to $5 billion over the next two years to develop Claude Next. These documents show that the new model aims to be ten times more powerful than any existing generative AI system on the market. Achieving such capabilities would require access to a computing infrastructure capable of delivering a staggering 10 septillion floating-point operations per second (FLOP), represented by a one followed by 25 zeros. That’s several orders of magnitude larger than quintillion FLOPs, which is the typical performance level of today’s most powerful supercomputers.

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