#FTX #Anthropic #Bankruptcy #AI #VentureCapital #LegalFees #CryptoExchange #Creditors
In a notable move within the cryptocurrency and artificial intelligence sectors, the bankrupt crypto exchange FTX has reached an agreement to sell its substantial stake in AI startup Anthropic for a sum of $452.2 million, as announced in a bankruptcy court filing on May 31. This decision represents a pivotal development for FTX, which has been embroiled in financial difficulties following its high-profile bankruptcy in November 2022. FTX disclosed the sale of approximately one-third of its 4.5 million shares of Anthropic to G Squared, a global venture capital fund, for $135 million, with over 20 other venture capital entities, including high-profile names like Gemini Ventures, Fund FG-BLU, and Fund SCVC-PV-LXVI, also participating in the transaction.
The sale of Anthropic shares by FTX, still awaiting approval from Judge John Dorsey, is anticipated to total about $1.3 billion, potentially netting the company around $800 million in proceeds. This move is particularly significant given FTX’s initial investment of $500 million in Anthropic back in 2021, securing a 7.8% ownership stake. Anthropic stands out in the AI domain for aiming to launch AI models with more robust ethical guardrails compared to its competitors, including OpenAI’s ChatGPT. The company, established by former employees of OpenAI, has been on the radar of major tech investments, notably receiving significant financial backing from Google.
However, this financial strategy by FTX to divest its Anthropic stake has not been without controversy. Certain creditors have argued that the shares should be allocated to the customers of FTX, highlighting that it was their deposits that initially funded the lucrative investment. Moreover, the unfolding circumstance has brought FTX’s management of legal expenses under severe scrutiny. Recent bankruptcy filings have illuminated that FTX has racked up $700 million in legal and administrative costs, leading to criticism from creditors who argue that the advisor’s decisions have led to a substantial erosion of creditor value. Consulting firm Alvarez & Marsal and legal counsel Sullivan & Cromwell are among the entities that have billed FTX with substantial fees, alongside FTX CEO John Ray III’s notable billing rate.
As FTX continues to navigate its complex bankruptcy proceedings, the outcome of the Anthropic stake sale and the handling of its escalating legal costs remain critical issues. Stakeholders and observers alike are keenly watching as these developments will significantly influence the path to recovery for FTX’s creditors and provide insights into the broader implications for the cryptocurrency and AI sectors.
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