VCs Are Acting Strangely in OpenAI and Anthropic Deals

It’s one thing for Google, Microsoft and Nvidia to buy shares of mature artificial intelligence startups at inflated prices. But when venture capitalists known for backing young startups do it, we can’t help but scratch our heads and wonder why.

Take Menlo Ventures, which is leading an investment in OpenAI’s most comparable rival, Anthropic, my colleagues reported on Wednesday. The round values the company at $15 billion or higher, at least 75 times its annualized revenue, many times greater than public stock valuations and even higher than what investors are paying for shares of OpenAI right now. As we discussed two months ago, Anthropic makes OpenAI look cheap.