The Startup that is Winning Over Investors, Tech Giants, and Developers

Anthropic is a rare startup that enjoys widespread admiration from users, investors, and tech giants alike. With its recent $3.5 billion Series E funding, the company’s valuation has soared to $61.5 billion. Moreover, the company’s annual revenue increased from $1 billion at the end of last year to $1.4 billion earlier this month. 

The OpenAI rival projects that its revenue could grow as high as $34.5 billion in 2027.

Since its coding models are well-received in the market, Anthropic is a safe bet for big tech companies from an investment perspective. The startup secured a $4 billion investment from Amazon Web Services (AWS) last year, cementing it as its primary cloud provider. On top of that, Amazon recently launched Alexa+, its next-generation personal assistant powered by Anthropic’s Claude.

“Anthropic is developing a developer ecosystem, and they’re a big company that we back. We want to connect them with startups that are using their API, align them with what the product vision should look like based on how startups are using them,” said Deedy Das from Menlo Ventures, who leads Anthlogy Fund in partnership with Anthropic. 

Besides, Anthropic may have closer ties to Google than appears on the surface. According to legal filings from a Google antitrust case, reported by The New York Times, the search giant owns 14% of Anthropic. However, this investment grants Google little control over the company. The filings state that Google’s ownership is capped at 15%, with no voting rights, board seats, or board observer privileges at the start-up.

So far, Google has invested over $3 billion in Anthropic, including an initial investment of $2 billion and a recent additional commitment of $1 billion. In 2023, Anthropic chose Google Cloud as its preferred provider, using Google's advanced TPU and GPU clusters for training, scaling, and deploying its AI models. 

Why Everyone Loves Anthropic

Unlike other AI companies that get a lot of limelight, Anthropic prefers to let its products do the talking. The company recently launched its latest model, Claude 3.7 Sonnet, which is better than OpenAI o1, o3-mini, and DeepSeek R1 in coding. As soon as the model was launched, it was made available on Windsurf, Cursor, Github, Replit, Google Vertex, and AWS Bedrock. 

“If you’re a senior software engineer, Devin + Claude 3.7 Sonnet is a legit team of mid-level software engineers,” said Sahil Lavingia, founder of Gumroad, an e-commerce site.

The company also launched Claude Code, an agentic coding tool integrated directly into the terminal. Unlike traditional AI coding assistants that focus on code completion within IDEs, Claude Code functions as a command-line interface (CLI) tool, enabling developers to interact with it using natural language commands.

“Claude Code with Sonnet 3.7 is the closest thing to AGI I’ve seen. It’s magic,” said Das on X. He built a Connect 4 app from scratch using it and observed that it can generate approximately 5,000 lines of code in 30 minutes.

Interestingly, even the trending Chinese AI agent Manus is built as a wrapper around Claude. “We use Claude and various Qwen fine-tunes. When we started building Manus, we only had access to Claude 3.5 Sonnet v1 (which lacked long-CoT or reasoning tokens), so we needed multiple auxiliary models. Now, Claude 3.7 looks really promising—we're testing it internally and will post updates soon!' said Yichao ‘Peak’ Ji, CEO and co-founder of Manus.

Anthropic chief Dario Amodei believes AI will do 90% of coding in less than 6 months. “Programming is one area where AI is making most progress. We are not far from a world where, in 3-6 months, AI will write 90% of the code,” he said. 

Last November, Anthropic introduced MCP (model context protocol), an open-source protocol created to enhance the capabilities of AI agents by providing a standardised way to integrate external tools and data sources. MCP acts as a universal protocol, similar to a USB-C port for AI applications, allowing different AI systems to connect to various data sources without requiring custom coding for each integration.

Anthropic is only getting started. If not new models, we will surely see some revolutionary products from them this year.