Can Google’s $2 billion investment in Anthropic help FTX fully recover?

Can Google's $2 billion investment in Anthropic aid FTX's complete recovery?

Author: Oluwapelumi Adejumo; Source: beincrypto; Translation: LianGuai, Ke Dong

Hedge fund manager Travis Kling believes that Google’s recent $2 billion investment commitment to artificial intelligence company Anthropic will help push FTX towards full recovery from bankruptcy.

Reportedly, on October 27, 2023, tech giant Google pledged to invest $2 billion in Anthropic, including an initial $500 million investment and plans to gradually inject the remaining $1.5 billion.

FTX’s bankruptcy close to full recovery

On social media X (formerly Twitter), Travis Kling, founder of Ikigai Asset Management, said that Google’s investment in this AI company will help bring FTX’s bankruptcy close to full recovery. He stated:

“Currently, FTX’s bankruptcy is close to full recovery. Although it will take several years to repay completely, the assets and customer deposits may now reach approximately 1:1.”

However, Ari LianGuaiul, founder of BlockTower Capital, has a different opinion and believes that Google’s investment does not necessarily mean that Anthropic will return the cash. Paul said:

“Anthropic may never return the cash, and this could be a similar mistake: assuming that FTX has the ability to pay due to holding SRM and FTT shares. In my opinion, achieving approximately half of the recovery is also a huge question, and most of it is not a true ‘valuation round.'”

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

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

Therefore, Anthropic’s valuation is expected to exceed the reported $4.1 billion earlier this year, reaching over $20 billion. This increased valuation could significantly boost FTX’s equity in the company, surpassing $4 billion.

SBF admits mistakes

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

SBF admitted that “many people were hurt” when FTX announced bankruptcy last year. The former CEO also pointed out that one mistake he made in the bankrupt company was not appointing a risk manager.

In addition, SBF blamed his former colleagues Caroline Ellison, Gary Wang, and Nishad Singh for not playing their roles well when the exchange was in trouble.

He argued that Ellison did not follow his instructions regarding risk hedging at Alameda. On the other hand, Wang and Singh, although under his supervision, had the authority to make autonomous decisions.

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