Saudi and UAE investors blocked from FTX’s Anthropic stake deal

Artificial intelligence startup Anthropic is reportedly navigating the sale of an 8% stake previously owned by the now-defunct crypto exchange FTX. However, the competitor to OpenAI wants to exclude investors from Saudi Arabia due to national security concerns.

The impending sale of FTX’s stake in Anthropic has attracted attention from global investors, including sovereign wealth funds.

Despite the broad interest, Anthropic has ruled out accepting investments from Saudi entities, focusing instead on other potential backers, including the UAE-based sovereign wealth fund Mubadala.

The sale process, expected to conclude within weeks, follows a failed attempt in June 2023, hampered by prolonged due diligence. The New York bankruptcy court’s approval in February for FTX to divest its shares in Anthropic marked a critical step towards resolving the crypto exchange’s bankruptcy proceedings and compensating its clients.

The move marked the latest effort by the crashed crypto platform to settle debts after its spectacular meltdown in 2022 shook the industry to its core.

The path to this divestiture became clearer in October when the U.S. Department of Justice waved off FTX’s Anthropic dealings as a non-issue in their case against FTX’s founder Sam Bankman-Fried.

This concept of a “clawback” isn’t new to bankruptcy proceedings, essentially allowing a bankruptcy trustee to retrieve assets or payments made pre-collapse. FTX’s strategy also included liquidating Ledger X, a derivative trading platform, to M7 Holdings for $50 million back in May.

The journey to sell Anthropic’s stake hasn’t been smooth, hitting a pause last June, just as whispers of the sale began circulating. This delay coincided with Anthropic rolling out its Claude 2 AI model in July, a move that saw the value of FTX’s stake in the company soar from $500 million to a whopping $1 billion.

FTX’s asset liquidation spree doesn’t end with Anthropic. Back in September, the court allowed the sale of $3.4 billion worth in cryptocurrencies, including Solana, Ethereum, and Bitcoin, albeit capping weekly sales at $100 million. The filings revealed FTX’s hefty crypto holdings, which included $1.16 billion in SOL, $560 million in BTC, $192 million in ETH, and $137 million in APT.

This recent approval to sell a 7.84% stake in Anthropic came after a stalled first attempt last June due to extended bidder due diligence. FTX and Alameda had initially poured $500 million into Anthropic back in 2021, with the investment’s value now speculated to be around $1 billion as Anthropic’s worth tripled to $15 billion.