Can Google’s $2 Billion Investment in Anthropic Enable FTX to ‘Fully Recover’?

Hedge fund manager Travis Kling believes that Google’s recent $20 billion investment commitment in artificial intelligence company Anthropic will help propel FTX from bankruptcy to full recovery.

On October 27, 2023, it was reported that technology giant Google pledged to invest $2 billion in Anthropic, including an initial investment of $500 million, and planned to gradually inject the remaining $1.5 billion.

FTX’s bankruptcy is close to full recovery

On social media X (formerly Twitter), Ikigai Asset Management founder Travis Klinger said that Google’s investment in the artificial intelligence company will help bring FTX’s bankruptcy closer to a full recovery. He said:

“At present, FTX bankruptcy is close to full recovery. Although it will take years to pay off, the assets and customer deposits may now be roughly 1:1.”

However, Ari Paul, founder of BlockTower Capital, disagrees, saying that Google’s investment does not mean Anthropic will return cash. Paul said:

“Anthropic may never return cash, which is probably similar to the mistake of thinking FTX is solvent due to its SRM and FTT holdings. Getting to about half of the recovery is also a huge question mark in my opinion, and most of it is not even a true ‘valuation round’.”

Last year, FTX and its affiliate Alameda Research invested $500 million in Anthropic.

Since then, Anthropic has made significant progress, creating Claude2, a chatbot that competes with OpenAI’s ChatGPT, and garnering nearly $7 billion in funding in the past year.

As a result, Anthropic’s valuation is expected to surpass the $4.1 billion reported earlier this year to over $20 billion. This increased valuation could significantly boost FTX’s stake in the company to over $4 billion.

SBF admits mistake

Meanwhile, former FTX CEO Sam Bankman-Fried (SBF) admitted to mistakes he made during his tenure at the exchange during a criminal trial in New York.

SBF admitted that “a lot of people got hurt” after FTX declared bankruptcy last year. The former CEO also noted that one of the mistakes he made at the bankrupt company was not appointing a risk manager.

In addition, SBF accused his former colleagues Caroline Ellison, Gary Wang and Nishad Singh of failing to play their roles when the exchange got into trouble.

He argued that Ellison did not follow his instructions on Alameda's hedging risk. On the other hand, Wang and Singer were entitled to make their own decisions despite his supervision.