Anthropic and AI Startups: Silicon Valley Under Pressure

Anthropic: An Unexpected Success Story

Anthropic, a company co-founded by Dario Amodei, represents an emblematic case in the landscape of tech startups. In 2024, this artificial intelligence-focused company achieved an impressive valuation of $1.2 trillion in the secondary markets. This astronomical figure makes Anthropic an obvious investment choice today. However, the situation was quite different the previous year. In 2023, Anthropic generated no revenue, had no public business model, and lagged far behind the industry leader, OpenAI. At that time, its valuation was limited to $4.1 billion.

Matt Murphy, a partner at Menlo Ventures, shared with Ben Bergman from Business Insider the challenges faced by the venture capital firm in investing in Anthropic. Menlo Ventures had to bypass several of its own criteria to approve this investment. After several funding rounds, Menlo's initial investment of $1 billion is now worth approximately $14 billion. What seems obvious today was far from certain when the first check was signed. "There was definitely some discomfort within the firm," Murphy revealed.

Growing Obstacles for Startups

Anthropic remains an exception in the startup world, not the norm. The term "unicorn" is not used lightly; it highlights the rarity of startups reaching a valuation of one billion dollars. For every unicorn, thousands of other startups fail to cross that threshold.

The odds of success have never been particularly high — if they were, everyone would be trying their hand at it — but they are about to become even slimmer. Several factors explain this trend:

• Lower Barriers to Entry: Artificial intelligence has simplified the creation of startups. With tools like "vibe coding," even those who do not master complex programming languages like C++ can turn an idea into a business without an army of developers. If sorting through the many startups was already complex, it is about to become even more challenging.

• Influx of New Capital: Major acquisitions and spectacular IPOs create new millionaires every day. Many founders become investors, and there will be a multitude of people ready to inject funds.

• FOMO (Fear Of Missing Out) Effect: For every success, many have narrowly missed the opportunity. This fear of missing the next big deal drives some to invest hastily in the next opportunity. Doubling down to make up for a missed chance can be risky, and it drives up prices for everyone looking for good deals.

An Uncertain Conclusion

How will this situation evolve? Venture capitalists are used to making bets that do not always pay off. Their work may become more complex, but that does not mean the end of their activity.

For the general public, public markets are far more ruthless than private markets. Thus, when some of these startups finally succeed, it is often individual investors who find themselves shortchanged.