AI safety and research firm Anthropic has raised USD 580 million in Series B, led by Sam Bankman-Fried, chief executive at FTX. Caroline Ellison, Jim McClave, Nishad Singh, Jaan Tallinn, and the Center for Emerging Risk Research (CERR) have participated in the funding round.

Anthropic was founded by siblings Dario Amodei and Daniela Amodei in 2021. The San Francisco-based startup focuses on making AI systems more steerable, robust, and interpretable. Anthropic has made progress in reverse engineering the behaviour of small language models and understanding the source of pattern-matching behaviour in large language models.

The startup has developed baseline techniques to make large language models more “helpful and harmless”, used reinforcement learning to improve these properties, and released a dataset to help research labs train models more aligned with human preferences. 

Did Anthropic raise too much & too soon?

Julien Chaumond, co-founder and CTO of Hugging Face, asked whether one needs USD 580 million to build the future of AI.

According to a Statista report, in 2022, the artificial intelligence market in North America is projected to be worth USD 24.9 billion. Of course, huge funding rounds are not a new phenomenon in Silicon Valley. However, raising colossal amounts of money is not always a good thing. For starters, it creates a lot of hype and raises expectations. And if the company fails to live up to the hype, it can lead to a down round later and render the company untenable.

“With this fund raise, we are going to explore the predictable scaling properties of machine learning systems, while closely examining the unpredictable ways in which capabilities and safety issues can emerge at scale.

 “We have made strong initial progress on understanding and steering the behaviour of AI systems and are gradually assembling the pieces needed to make usable, integrated AI systems that benefit society,” said CEO Dario Amodei.

Anthropic will use the fresh capital to strengthen its team and build large-scale experimental infrastructure to explore and improve the safety properties of computationally-intensive AI models. 

Commenting on Choumond’s tweet, François Chollet, software engineer and artificial intelligence researcher at Google, said, raising too much money is the most reliable way to fail. “As a general philosophy, I would not take large amounts of money before being in a position of having a product that has traction and needs scaling,” he added.

According to a Gartner report published in 2019, about 80 percent of AI projects never made it to production. Tom Simonite, a senior writer at the Wired, took to Twitter to question what kind of return or payoff the investors are expecting?

However, a section of Twitterati feels Anthropic’s mega funding round is justified. The companies need deep pockets to meet the rising compute requirements to train large-scale models.

AI funding on the rise

Anthropic is not the first AI startup to close a significant funding round. And, it won’t be the last. SenseTime, founded in 2014, has raised a staggering USD 2.6 billion over nine separate funding rounds. Last year, the China-based AI solution provider did an IPO.

Shenzhen-based UBTech Robotics has raised USD 940 million since its inception. In its Series C funding round led by Tencent, the company raised USD 820 million. 

Funding for AI startups has significantly grown over the years. According to a Statista report, AI startups globally attracted around USD 36 billion in investment in 2020. AI startups raised USD 38 billion alone in the first six months of 2021. In the second quarter of 2021, funding in AI globally reached USD 20 billion, double the amount compared to the same quarter in the previous year.

According to the CBInsights report, ‘State of AI 2021’, global funding for AI stood at USD 66.8 billion, up by 108 percent year on year. The top 10 rounds were dominated by industry-agnostic data science, AIOps, and RPA solution providers. Lacework, the data-driven security platform for the cloud, raised USD 1.3 billion in growth funding at a valuation of USD 8.3 billion

Mega funding rounds accounted for 61 percent of the total USD 66.8 billion. There were 179 mega rounds in 2021, up by 127 percent year-on-year.