Anthropic, Menlo Ventures Launch $100M AI Fund, Challenges OpenAI

Anthropic and Menlo Ventures launch $100M Anthology Fund for startups, inspired by Apple and Kleiner Perkins’ 2008 iFund success, says Menlo’s Matt Murphy

Anthropic and one of its largest investors are adopting Apple’s approach.

On Wednesday, Menlo Ventures and the artificial intelligence startup will establish a $100 million fund to support early-stage businesses and enable them to utilize the AI company’s technology.

The founders will receive $25,000 in credits from Anthropic, which will be used to utilize its large language models, while Menlo will provide the necessary funding to invest in the ventures.

The Anthology Fund’s inception is indicative of Apple’s collaboration with Kleiner Perkins, a venture capital firm. In 2008, the iFund, a joint venture, was established to provide developers with support on Apple’s mobile platforms, one year following the iPhone’s release.

The initial investment was $100 million in 2008, which was subsequently doubled to $200 million two years later.

Matt Murphy, a former partner at Kleiner Perkins and a partner at Menlo Ventures, stated that the iFund catalyzed this initiative.

Murphy stated to CNBC, “That was a resounding success; it provided Apple with a comprehensive understanding of a diverse group of early developers and the areas in which they should focus more.”

“It also provided developers with a direct view of some of the products that Apple was considering for sale.” Numerous analogies exist in this context.

Murphy asserted that the primary distinction is that AI is progressing at a quicker pace than iPhone development. He stated that the current surge of AI is occurring at a rate that is 10 to 100 times faster than “what was previously the largest wave of innovation we have ever witnessed.”

Venture capitalists are currently seeking methods to enhance their offers to attract AI startups, as investors are flocking to the most promising transactions. According to Crunchbase data, the funding for AI firms more than doubled in the second quarter from the first, surpassing $24 billion.

Anthropic is providing coaching, quarterly meetups, and other resources, such as a “bat phone” or, as Murphy characterized it, a “hotline” directly to the company.

However, Anthropic will not issue equity payments or acquire a financial interest in the startups. Daniela Amodei, who co-founded Anthropic with her brother, Dario, after departing from rival OpenAI, stated that the company aims to establish a feedback cycle. The more Anthropic collaborates with developers, the more it can enhance its products.

Daniela Amodei stated to CNBC that the high cost of entry into the AI industry can serve as a deterrent to the establishment of a company. “Our objective is to provide that element.” We are offering credits and guidance on how to begin participating in the ecosystem.

The underlying infrastructure of Anthropic can also be leveraged by the next iteration of high-flying AI companies. Anthropic is in direct competition with OpenAI, the company that developed ChatGPT.

OpenAI has its venture fund, the OpenAI Startup Fund, which, according to its website, is “investing $175 million to assist AI companies in making a profound, positive impact on the world.”

Murphy distinguished the Anthology Fund and stated, “It is challenging to establish alignment with another strategic partner.”

“It is a distinctive opportunity for Anthropic, us, and a group of entrepreneurs that we will be funding over the next few years to participate in this, establish a strong community, collaborate, and execute some of the most innovative and disruptive projects,” Murphy stated.