Inc. Magazine
Anthropic’s rise is not just about better models or bigger valuations.
How Did Anthropic Become More Valuable Than OpenAI? Here’s the Answer, in Just 1 Word
Author: Justin Bariso
Anthropic made headlines this week when it hit a $965 billion valuation in its latest funding round, surpassing its chief competitor, OpenAI.
You might be wondering: How in the world did Anthropic become more valuable than OpenAI, despite OpenAI having a six-year head start and Anthropic basically being started by former OpenAI employees? It’s as if a small group of rogue Apple employees left the company, and then built a company that surpassed Apple. (Incidentally, Steve Jobs tried to do just that, but his company NeXT was eventually acquired by Apple.)
There are several factors influencing Anthropic’s current rise, including the fact that the company’s revenue is set to reach $10.9 billion in the second quarter (more than double the previous quarter), leading to what experts expect to be the company’s first profitable quarter, something OpenAI seems to be years away from.
But there’s another cause underpinning all these factors, and we could sum it up in just one word: trust.
This is a classic case study in emotional intelligence, which includes the ability of managing relationships. To see how Anthropic built trust, let’s go back to its origin story. Then, we’ll analyze the specific moves the company made to gain trust with the general public, users, and investors.
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Trust within the company
In 2020, a small group of OpenAI employees left the company and started Anthropic soon after. This included current Anthropic CEO Dario Amodei.
So, why exactly did Amodei leave?
The answer is complex, but in an interview with Fortune Amodei himself stated that a major factor for him and his colleagues was the idea that an AI company needs more than simply scaling up, and that “more” is alignment, or safety. Since then, Amodei has been very public about the potential dangers of AI, and the need for AI companies to make safety among the highest priorities.
“We really trusted each other and wanted to work together,” said Amodei. “And so we went off and started our own company with that idea in mind.”
There’s that word again: trust.
Interesting side note: Andrej Karpathy, who was on the founding team at OpenAI, previously served as the director of AI at Tesla, and is one of the most widely respected voices in AI and computer science as a whole, recently announced he’s joining Anthropic—further evidence of the reputation of the trust Anthropic has established.
Trust with the general public
A few months ago, that trust was put to the test. There was a dispute between the United States government’s Department of Defense and Anthropic, whose models were being used on the DoD’s classified networks. The details are complicated, but reportedly, the dispute centered on the fear that the DoD could use Anthropic’s models for domestic mass surveillance or autonomous weaponry.
The result was fascinating: As a result, the Pentagon terminated its relationship with Anthropic and marked the company as a “supply chain risk,” essentially labeling Anthropic’s technology as a threat to U.S. national security. Around the same time, the DoD announced it had entered agreements with seven AI companies, including OpenAI.
Surprisingly, though, this move actually seemed to help Anthropic.
Public opinion suddenly shifted in support of Anthropic. The company’s leaders were seen as unwilling to compromise their values, despite huge economic loss. This was in stark contrast to OpenAI, which was battling the reputation of “selling out” for economic interests. For example, Elon Musk famously sued OpenAI under the claim that the company deviated from its original nonprofit structure and mission to develop AI for the benefit of humanity, despite millions of dollars of investment by Musk to support that mission.
Trust with users
Anthropic has also built trust with its users.
For my own research and business, I regularly use AI tools from both companies, namely, Anthropic’s Claude and OpenAI’s ChatGPT. I often run prompts through both models, to compare and contrast the results.
To be clear, I find both company’s models useful. But I trust Claude more than ChatGPT. Claude hallucinates less. (The key word is “less”: It definitely still hallucinates.) Claude is also more critical (in a good way) and pushes back on my ideas more than ChatGPT does. And, in my experience, Claude is more measured, more balanced, and more grounded in its responses.
All of this inspires trust.
Trust with investors
Finally, Anthropic has built trust with investors by defining a clearer path to profitability, and demonstrating its ability to execute on that vision. They did it by using a much different strategy than OpenAI.
Whereas OpenAI initially focused on mass adoption, Anthropic focused on building tools that would prove useful for business, and then obtaining enterprise deals. Just one of Anthropic’s tools, Claude Code, revolutionized an industry, with programmers saying it fundamentally changed the way they carry out their work.
Oh, and Anthropic has managed to do this while spending billions less on training its models, according to a recent report by The Wall Street Journal.
Of course, we’re still in the beginning of the AI war for dominance. There are surely many twists and turns yet to come, and both OpenAI and Anthropic will continue to make strides and improvements.
But my prediction is whoever wins the most trust, will win. And right now, Anthropic is riding high.
Credits: TCA, LLC.