FTX raises funds for creditor obligations with its $884 million Anthropic purchase.
With a $500M buy-in on FTX’s Anthropic shares, ATIC takes the lead.
Amid the AI boom, FTX invested over $1 billion in Anthropic.
Anthropic, an artificial intelligence business, has agreed to sell a significant chunk of its shares to the bankruptcy estate of former cryptocurrency exchange FTX. This $884 million agreement involving several institutional investors is important in FTX’s ongoing bankruptcy proceedings.
Details of the FTX Sale and Important Players
The agreement involves FTX selling about two-thirds of its 8% ownership stake in Anthropic, a major player in AI. ATIC Third International Investment Company LLC, connected to the United Arab Emirates’ Mubadala sovereign wealth fund, is one of the main buyers and will buy $500 million in shares.
In addition, a syndicate of twenty additional people, venture capital firm HOF Capital, Jane Street, and a collection of funds overseen by Fidelity Management and Research are stakeholders in the acquisition.
FTX to Sell Majority of Anthropic Stake for $884 Million (1)
Mubadala, Jane Street among the 24 buyers of FTX’s haul
Sales will add to sizeable cash pile for repaying creditors
By Emily Nicolle
(Bloomberg) — The estate of bankrupt crypto exchange FTX is offloading about… pic.twitter.com/OTx4Ck6QXh— Martin Shkreli (e/acc) (@wagieeacc) March 25, 2024
FTX’s estate is currently selling assets to raise funds and repay creditors. This follows the exchange’s bankruptcy declaration due to fraud allegations. After a U.S. bankruptcy judge permitted FTX to begin selling the shares, the sale is still awaiting clearance in bankruptcy court.
Context and Assessment
FTX first made a $500 million investment in Anthropic in 2021 after the trading platform approved the funding. The position was among FTX’s most expensive shares, particularly when the AI market was expanding due to the growing focus and funding allocated to the advancement of AI technology.
The philanthropic sector has garnered significant attention and financial backing, notably from prominent technological giants such as Alphabet Inc.’s Google and Amazon.com Inc.
The Anthropic share was valued at over $1 billion during FTX’s bankruptcy, demonstrating the steadily rising valuations of the AI industry. “The majority of the 5% share is currently selling for $884M, reflecting the strong valuation and ongoing demand for AI-focused businesses.”
Process and Strategic Implications
The FTX bankruptcy estate made an operational choice to remove practically all of its stake in Anthropic to raise funds to repay creditors. The deal increases the estate’s cash reserves, highlighting the substantial holdings and keen interest in businesses developing artificial intelligence.
Furthermore, a partnership with diverse investors demonstrates Anthropic’s broad appeal and ambition in the rapidly expanding AI market.
Despite the need for lengthy haggling with potential bidders and obtaining judicial clearance, the sale procedure has been well planned. Leading businesses and investors participated in the deal, demonstrating Anthropic’s strategic importance in AI and the value placed on its technological know-how and commercial prospects.
