Anthropic is in talks to raise US$3 billion to US$5 billion in a funding round led by Iconiq Capital, which could value the US-based AI startup at US$ 170 billion, according to CNBC.

Anthropic develops AI models and is seen as a competitor to OpenAI.

The company previously raised US$3.5 billion in March at a US$ 61.5 billion valuation, with Lightspeed Venture Partners leading that round.

Recent reports suggest the latest valuation could range from US$150 billion to US$170 billion, with some investors from the Middle East involved in discussions.

A memo obtained by Wired indicates CEO Dario Amodei is reconsidering the company’s previous stance on accepting funding from Gulf sovereign wealth funds, citing challenges in maintaining AI leadership without such capital.

Rival OpenAI has also sought Middle Eastern investment and is currently raising funds at a valuation of about US$300 billion, with the round still ongoing.

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🔗 Source: CNBC

🧠 Food for thought

1️⃣ AI valuations are reaching unprecedented heights even by unicorn standards

Anthropic’s potential $170 billion valuation would place it among an extremely exclusive group of companies called “hectocorns,” private companies valued at over $100 billion1.

The jump from $61.5 billion to $170 billion in less than a year represents a 176% increase, demonstrating the extreme valuation inflation currently affecting leading AI companies.

For context, there are only 1,276 unicorn companies globally with a combined valuation of approximately $4.4 trillion1.

Anthropic’s valuation trajectory reflects the broader AI funding surge, where OpenAI recently achieved a $300 billion valuation through its $40 billion funding round2.

This positions both companies alongside historically dominant tech giants, suggesting investors believe AI represents a fundamental shift in computing rather than just another technology trend.

The speed of these valuation increases far exceeds traditional venture capital patterns, where companies typically take years to achieve such dramatic increases in worth.

2️⃣ Massive AI capital requirements are forcing companies toward new funding sources

Anthropic’s reversal on Middle East funding reflects the enormous capital requirements of frontier AI development that traditional venture sources cannot fully satisfy.

CEO Dario Amodei’s memo acknowledging it’s become “substantially harder to stay on the frontier” without Gulf sovereign wealth represents a pragmatic shift from previous national security concerns.

The trend extends beyond Anthropic—OpenAI is working with UAE firm G42 to build massive data centers in Abu Dhabi while still needing to raise $30 billion of its planned $40 billion round[original article].

This funding source diversification comes as AI companies face unprecedented infrastructure costs for training increasingly sophisticated models.

The move toward Middle Eastern sovereign wealth funds highlights how the capital intensity of AI development is reshaping traditional venture funding patterns, prompting even the most well-funded startups to consider previously avoided funding sources.

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