5 Ways to Enter Into Anthropic: Navigating the Future of AI Investments
The main competitor to OpenAI (the creator of ChatGPT), is the next highly anticipated private AI company that could go public in the coming years
Anthropic, the developer behind the AI assistant Claude, has rapidly emerged as a significant player in the artificial intelligence sector. Founded in 2021 by former senior members of OpenAI, Anthropic has attracted substantial investments, including $8 billion from Amazon and $2 billion from Google, leading to a valuation of $18.4 billion as of May 2024. Despite its prominence, Anthropic remains a private entity with no immediate plans for an initial public offering (IPO). However, investors have several avenues to gain exposure to Anthropic's growth potential.
1. Investing in the Fundrise Innovation Fund
The Fundrise Innovation Fund is a venture capital fund accessible to all investors, regardless of accreditation status. This fund focuses on privately held technology companies across sectors such as artificial intelligence, machine learning, and big data. Its portfolio includes investments in companies like OpenAI, Anduril Industries, and Anthropic. With a minimum investment of just $10 and an annual management fee of 1.85%, the Innovation Fund offers a cost-effective entry point into the private tech market. Investors should be aware that investing in the fund means acquiring a stake in the entire portfolio, not just Anthropic. Bear in mind, that you have to be US citizen to be able to purchase shares of this fund.
2. Investing in the ARK Venture Fund
Managed by Cathie Wood, the ARK Venture Fund targets what it identifies as the world's most innovative companies, encompassing both privately held and publicly traded entities. Anthropic is the fund's sixth-largest holding, constituting approximately 4.22% of the total fund.
The ARK Venture Fund made its investment in Anthropic in July 2023, likely at a valuation between $2–4 billion, suggesting that the stake has appreciated significantly. By investing in ARKVX, you will also have exposure to companies such as Open AI (5,07%), Space X (12,40%), Discord (4,01%) and more. Accredited investors can invest in the ARK Venture Fund through ARK's website, while retail investors have access via platforms like SoFi. The fund carries total fees of 2.90%.
3. Investing in Anthropic's Corporate Partners
Anthropic has established strategic partnerships with major corporations, notably Google and Amazon. In April 2023, Google invested $300 million in Anthropic, acquiring a 10% stake and entering into agreements for Anthropic to utilise Google's cloud computing services. This partnership provides Anthropic with essential funding and technological resources, while Google gains access to Anthropic's AI advancements.
Subsequently, in October 2023, Google invested an additional $2 billion. Similarly, Amazon invested $1.25 billion in Anthropic in September 2023, with plans to invest up to $4 billion. By May 2024, Amazon fulfilled this commitment, marking its largest external investment to date. These alliances indicate that investing in Google (GOOGL) or Amazon (AMZN) could provide indirect exposure to Anthropic's growth. However, given the vast scale of these corporations, their stakes in Anthropic represent a small fraction of their overall operations.
4. Investing in Other AI-Focused Companies and Funds
Beyond Anthropic, the artificial intelligence sector offers various investment opportunities. Companies like Microsoft (MSFT), Google (GOOGL), and Amazon (AMZN) are deeply involved in AI development and have partnerships with leading AI firms. For instance, Microsoft's substantial investment in OpenAI and integration of AI into its products highlight its commitment to the field. Investing in these tech giants provides exposure to the broader AI industry, though it's essential to consider their diverse business operations. Additionally, specialised AI-focused funds and ETFs can offer diversified exposure to the sector, encompassing a range of companies at the forefront of AI innovation.
5. Exploring Pre-IPO Investment Opportunities
For investors interested in early-stage opportunities, platforms like Hiive facilitate investments in pre-IPO companies, including Anthropic. These platforms connect accredited investors with shareholders of private companies seeking liquidity. While this approach allows for direct investment in promising startups, it comes with higher risks due to the inherent volatility and uncertainty associated with early-stage companies.
Thorough due diligence and a clear understanding of the risks are crucial when considering pre-IPO investments. Hiive provides transparency by allowing users to view the full order book of bids and asks, offering insight into current trading prices for Anthropic's shares. It's important to note that participation on Hiive requires accreditation, which involves meeting certain income or net worth criteria.
Conclusion
Investing in Anthropic, despite its status as a private company, is feasible through various channels. Direct purchases via secondary marketplaces, investments in venture funds like the Fundrise Innovation Fund and the ARK Venture Fund, and indirect exposure through corporate partners such as Google and Amazon are viable options. Each method carries its own set of considerations regarding accessibility, risk, and potential returns. Prospective investors should assess their individual financial situations, investment goals, and risk tolerance. Reach to us if you want need guidance to navigate these investment opportunities effectively.