AI Startup Anthropic and Menlo Ventures Join Hands to Launch a $100 Million Startup Fund

• Anthropic teamed up with its biggest investor Menlo Ventures to set up a $100 million startup fund.
• Menlo will be the one doing the financial investing while Anthropic will help out new businesses by giving them a $25,000 credit to use its large language models.
• This move is a direct inspiration from iFund - a collaboration between Apple and venture firm Kleiner Perkins in 2008.

AI startup Anthropic and its biggest investor Menlo Ventures are launching a $100 million startup fund that will be used to back new startups.Menlo will supply the cash to invest in the startups.

• Exactly how much cash investment each new startup will get from Menlo will depend on a lot of factors but the minimum funding is expected to be $100,000.
• On the other hand, Anthropic will give startups $25,000 worth of credit to use its large language models.

Note: Credits act like virtual tokens that you can use to request a certain action from the AI tool. One request costs one credit.

Also, since Anthropic is not investing in cash, it will not have any financial stake in the startups. It will benefit by establishing a feedback loop - the more developers interact with its products, the more it will be able to improve its product.

Anthropic is already backed by Amazon, with a $4 billion investment.

How to Apply?

For those interested in applying for funding, an online form has been created where you need to share the details of your company, product, founders, and the core team. Menlo will then use its proprietary machine-learning tool to score and rank applications.

According to data from Crunchbase, investments for AI startups have more than doubled in the second quarter from the first, crossing $24 billion.

This startup fund is a direct inspiration from Apple's collaboration with venture firm Kleiner Perkins in 2008. The fund started with $100 million and then doubled to $200 million after two years.

Matt Murphy, a partner at Menlo Ventures and a former partner at Kleiner Perkins himself admitted to it.

He said that the collaboration was wildly successful and it really gave Apple a lens into a whole set of early developers, and what they need to be more attentive to."It also gave the developers an insight into a lot of things that Apple was planning on selling.

However, there's one major difference between the two arrangements. Compared to iPhones, AI is developing at a much faster rate. So naturally, investors are swarming towards the AI industry to make the most of this boom.

How Does It Affect Its Competition with OpenAI?

OpenAI is one of the leading companies in the AI industry and Anthropic is one of its biggest rivals. Anthropic has already launched its own version of AI chatbot Claude in Europe, which is in direct competition with ChatGPT.

OpenAI already has its own venture fund - the OpenAI Startup Fund. According to its website, it's investing $175 million to help AI companies have a positive impact on the world.

So it's good that Anthropic is finally catching up. An opportunity like this will not only help it improve its own products but it might happen that the companies it's supporting today with its AI infrastructure go on to become really successful. The bigger the company becomes, the more likely it is to invest more in Anthropic's products.

But Murphy put this in much better words. He says this is a unique opportunity for Anthropic to build a great community for everyone to learn and grow together and do something so innovative that it goes down in history.

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