AI firm Anthropic has blocked Saudi Arabia from engaging in the sale process of 8% of its shares — currently owned by defunct crypto exchange FTX, CNBC reported on March 22, citing people familiar with the matter.

FTX is selling the stake as part of its bankruptcy proceedings to repay its creditors, who lost billions due to its collapse. Investment bank Perella Weinberg is managing the sale, which has reportedly drawn interest from multiple sovereign wealth funds.

 

The sale is expected to be completed in the coming weeks.

National security risk

Saudi Arabia, despite its aggressive investment diversification efforts under Crown Prince Mohammed bin Salman’s “Vision 2030 Initiative,” has been barred from investing in Anthropic.

According to the report, Anthropic founders Dario and Daniela Amodei, who have ties to FTX founder and former CEO Sam Bankman-Fried through the effective altruism community, told bankers not to sell the stake to Saudi Arabia. The two are broadly uninvolved in the discussions but retain the right to vet potential investors.

Anthropic’s decision reportedly stems from considerations of national security and geopolitical complexities, including Saudi Arabia’s relations with China and its controversial human rights record, highlighted by incidents such as the alleged assassination of journalist Jamal Khashoggi in 2018.

The AI firm believes selling the shares to Saudi Arabia would be a national security risk because AI is a “dual-risk” technology that has both civilian and military use cases.

 

However, the company has not attempted to exclude other countries from participating in the sale — with the UAE’s Mubadala still in the running.

The US government has also raised concerns in recent weeks, and the Committee on Foreign Investment in the United States (CFIUS) can block foreign investments that are deemed risky to national security and may choose to intervene in the sale process considering the heightened interest from foreign state-backed entities.

Shares now worth $1 billion

Originally purchased by FTX for $500 million in 2021, the stake’s value has significantly increased in the wake of the AI sector’s rapid expansion and is worth more than $1 billion as of press time.

The sale of class B shares, which do not offer voting rights, is priced based on Anthropic’s last valuation of $18.4 billion and amounts to more than $1 billion as of March.

 

The sale of FTX’s Anthropic stake is part of the former company’s bankruptcy case. A court ruled that FTX could sell the stake in February. Sale proceeds will partially go toward compensating investors affected by the collapse of FTX, satisfying a concern that was raised when the court greenlit the sale last month. Estimates from mid-2023 suggest FTX owes customers about $8.7 billion.

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