Anthropic Eyes Israeli Startup Reportedly Coveted By Nvidia, SpaceX. What Is Spurring The Suitors

Anthropic is eyeing to Acquire a three-year-old artificial intelligence startup based in Israel, according to reports.

Bloomberg first reported that the Israeli artificial intelligence startup Decart is holding talks with the US AI giant and developer of Claude chatbot for as much as $6 billion.

According to the report, the talks are ongoing and may still not materialize. The deal assumes significance as this would be Anthropic's first acquisition in Israel. If reported $6 billion figure is true, this would be Anthropic's biggest acquisition to date.

Anthropic, which was started by a group of former OpenAI researchers in 2021, is a prominent developer of large language models (LLMs), the technology that powers conversational chatbots such as Claude AI or ChatGPT.

Anthropic and Decart have not commented on the reported talks for the proposed acquisition.

A previous report by Israeli media outlet Calcalist that said SpaceX was also in talks to buy Decart was denied by Elon Musk himself. Musk termed the report "fake news" on X, his social media platform.

Another report had said US chip giant Nvidia, backed by Jensen Huang, was also reportedly in the race to acquire the Israeli AI startup.

Decart was launched in late 2023 by 27-year-old Dean Leitersdorf and Moshe Shalev. The duo have served in Israel's military intelligence unit 8200, according to a report in The Times of Israel. Dean's brother Orian Leitersdorf is also among the founding trio of Israeli engineers of Decart.

So what makes Decart a coveted target of large AI firms? Decart's USP stems from the fact that it has built a software platform to train massive, real-time generative AI models across Nvidia, Amazon and Google processors.

Decart software platform is envisaged to optimize the utility of chips needed for training and running AI models. That would cut the computing cost of training AI models by helping chips work more efficiently, according to Decart, The Times of Israel report said.

In May, Decart announced it raised $300 million in a funding round led by Radical Ventures. Nvidia Corp., Atreides Management, Valor Equity Partners and Adobe Ventures also participated in that round, apart from previous investors Sequoia Capital, Benchmark and Zeev Ventures.

That boosted Decart's valuation to nearly $4 billion, according to a report in the Wall Street Journal. That boost came from a reported $3.1 billion valuation in August last year.

In July, Decart Chief Executive Officer Dean Leitersdorf said the company trains its AI on text and millions of hours of video, per the Bloomberg report.

He said Decart's technology is being used for live streaming on online platforms like Twitch, TikTok, and YouTube by influencers including CodeMiko.

The development also assumes significance as OpenAI and Anthropic have plans to spend billions of dollars on data centers stocked with costly chips. The firms are relying on hardware to meet their surging computing needs, which could be reportedly slashed with technology provided by players like Decart.

Some reports claim AI firms including Anthropic and OpenAI are also investing in devising ways to optimize computing power as massive data center investments have come under scrutiny of a host of stake holders including green activists and even investors expecting a speedy return on investment.

Anthropic and OpenAI are also preparing to list, probably making the proposed acquisition another key factor that would weigh on investors.