AI Race Heats Up: Lightspeed Backs Anthropic in $2B Deal, $60B Valuation

Lightspeed Venture Partners, a prominent venture capital firm, is making a major push into artificial intelligence, cementing its ambitions with a lead role in a massive $2 billion funding round for Anthropic, a leading competitor to OpenAI. This deal, which values Anthropic at a staggering $60 billion, underscores a broader trend in Silicon Valley: VC firms are now making enormous bets on a handful of AI companies, hoping to back the next trillion-dollar tech giant.

The AI Gold Rush: VCs Pour Billions into the Next Big Thing

The Anthropic deal, finalized in early January, triples the startup's valuation from just a year ago. Lightspeed, with $25 billion under management, is part of a select group of VC firms with the resources to participate in such "megadeals." The firm has also recently invested in Databricks Inc., valued at $62 billion, and Elon Musk's xAI, valued at $50 billion.

These massive AI investments are becoming increasingly common, despite the risks. In the last three months alone, xAI, OpenAI, and Anthropic have collectively raised over $20 billion, bringing their combined valuation to over $250 billion. In total, U.S. based AI startups raised a record-breaking $97 billion in 2024, according to PitchBook data.

FOMO in the Valley: The Pressure to Back a Winner

This surge in funding reflects a growing sense of urgency among VCs, particularly those who may have missed out on earlier opportunities to invest in top AI companies at lower valuations. "It shows you're in the game," said Peter Werner, co-chair of Cooley's venture capital practice group, about participating in these large rounds.

From Consumer Tech to AI: Lightspeed's Strategic Shift

Founded over two decades ago, Lightspeed is known for its early investments in companies like Snap Inc., Affirm Holdings Inc., and Rubrik Inc. However, the firm is now aggressively pivoting towards AI, having already invested $2.2 billion in the sector, not including the recent Anthropic deal. Lightspeed is also nearing the completion of a $7 billion fundraising effort, providing it with even more capital to deploy in the AI space.

Are AI Valuations Justified? Lightspeed's Optimistic Outlook

While the valuations of companies like Anthropic might seem exorbitant, Lightspeed partners are optimistic. "In aggregate, it feels like the valuations are expensive because we see a lot of activity and a lot of deals getting done," said Lightspeed Partner Guru Chahal at a Fortune Brainstorm Tech conference last year. "When you look back, every round, at the time, seemed incredibly expensive and, in retrospect, was incredibly inexpensive."