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AI startup Anthropic raises $3.5 billion

The startup’s valuation continues to put it in direct competition with OpenAI. However, like OpenAI, it faces market challenges.

Esther Shittu
By
Published: 03 Mar 2025

AI model provider Anthropic revealed it raised $3.5 billion, putting its total valuation at $61.5 billion.

The independent generative AI vendor said it plans to use the investment to develop next-generation AI systems, expand its compute capacity and deepen research.

The funding follows the 2021 startup’s release of Claude 3.7 Sonnet reasoning model and Claude Code at the end of February.

Anthropic versus OpenAI

Besides putting Anthropic on a stronger financial footing against its main rival, OpenAI, it also intensifies the competition between AWS and Microsoft in the AI race. Microsoft is the chief financial backer of OpenAI. AWS the principal financial backer and training partner of Anthropic.

"If you accept that AWS and Azure and others see AI as a feature and not a business in and of itself, part of the user experience, then that part of that battle is underway," said David Nicholson, an analyst with Futurum Group.

Anthropic represents a middle ground in the world of large language models because it emphasizes safety, governance and compliance, but it has also shown that it can match innovation from other big players in the AI market, said Kjell Carlsson, a former analyst at Forrester Research and head of AI strategy at AI platform vendor Domino Data Lab.

"This is the reason why investors are willing to go in and fork over very substantial amounts to them," Carlsson said.

However, Carlsson noted the $3.5 billion investment is relatively small compared to amounts raised by some vendors, notably Databricks, which recently completed a $15 billion funding round.

It's also smaller than the $6.6 billion OpenAI raised in October. OpenAI could is poised to reveal a new $40 billion investment from Softbank, according to reports.

"Relative to their competition, it's not [an] insane [amount], "Carlsson continued.

Business model and losing money

While many enterprises like the generative AI models provided by the AI vendors, companies still have trouble integrating the technology into their systems, Carlsson said.

“They really need to build their own capabilities to absorb the technology,” he said.  This is because every organization's data is different, so the integration process is different, he continued.

The integration challenge is likely one of the reasons reason independent generative AI model providers like OpenAI and Anthropic are still losing money.

Nicholson said that because of this, it is quite likely that neither Anthropic nor OpenAI will end up standing alone in the long run.

"My assumption is that each of them will become part of larger organizations. I don't see what they do as standalone businesses. I see them as features of others,” he said.

Lightspeed Venture Partners led the Series E funding round, which included participation from Bessemer Venture Partners, Cisco Investments, D1 Capital Partners, Fidelity Management and Research and Salesforce.

Esther Shittu is an Informa TechTarget news writer and podcast host covering artificial intelligence software and systems.

 

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