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Artificial intelligence has moved from science fiction to everyday reality remarkably fast. Close to one billion people now use AI chatbots daily. And they spend an average of 20 minutes on ChatGPT – on par with Snapchat. AI can generate films, write books and pass PhD exams. The technology’s capabilities are undisputed.
What remains disputed is whether this creates a sustainable business. Will foundation models become commoditised utilities, or can the right company build and defend a lasting advantage? This question kept us on the sidelines until now.
We’re investing now because the answer is becoming clearer. In the race for AI dominance, the field is spreading out. At the front of the pack, OpenAI and Anthropic are carving distinct identities – with models built with different priorities, for different users. OpenAI’s ChatGPT is capturing the enthusiasm of everyday users. Anthropic is emerging as the enterprise leader – particularly in the coding market, where it’s achieved product-market fit that translates into a defensible competitive edge.
While it is still early days, we believe that Anthropic’s strength in automating coding and focus on building safe, predictable AI models position it well to become a generational company that redefines knowledge work. And in this context – after years of discussions with leading AI companies – we have decided to invest in Anthropic for our clients.
Start from coding, the rest will follow
Anthropic was founded in 2021 by seven former employees of OpenAI who split away to develop a model with a greater focus on safety. Today, its frontier model Claude stands out for its transparency. It represents meaningful advances in reliability and interpretability, as Anthropic is working towards fully trustworthy AI systems. These are all features that businesses handling sensitive data and critical operations need to place their trust in autonomous agents.
Automating coding is the company’s first breakthrough product. Claude Code was initially developed to help Anthropic build its own products – today Claude Code agents write 90 per cent of Anthropic’s own code for some of its products. Now that it has been released externally, it has quickly established itself the leading product for AI coding.
The business case for coding alone is vast. North America and Europe collectively spend close to $600bn every year on software developer salaries, based on our research. Anthropic has an opportunity to take a slice of this market by replacing junior human coders with AI-powered ‘virtual collaborators’. Arguably, with coding talent a bottleneck in the digital economy, making coding more scalable can also increase the overall size of the pie.
Beyond coding, Anthropic is building products for financial services and life sciences. Claude for Financial Services could automate complex analysis, portfolio construction and research workflows that previously required teams of highly paid specialists. In life sciences, the prize is compressing drug discovery timelines that currently span years and cost billions of dollars.
Lead in coding, compute and culture builds an edge that lasts
Anthropic’s dominance in coding isn’t just a great product, it is strategic infrastructure. Coding is the foundational building block for developing new capabilities. If an AI can understand and write code, it can use tools, reason through multi-step problems and execute complex workflows autonomously. This is why Anthropic’s coding prowess can translate directly into better performance across all its future projects.
Moreover, its capital efficiency sets the firm apart. Anthropic trains frontier AI models at roughly half the cost of competitors by diversifying compute suppliers and structuring commitments intelligently. This allows them to offer competitive pricing while maintaining healthy margins.
The quality of human talent matters enormously when the underlying technology is still rapidly advancing. In a world of billion-dollar remuneration packages on offer from competitors – such as Meta – Anthropic’s low staff turnover of about 8 per cent demonstrates its ability to retain top talent in a fiercely competitive market.
From a science lab to an investment case
The excitement around AI is not new, and the leading companies have already become household names. Why are we choosing to invest now? The paradox is that, despite being some of the largest private businesses in the world, until recently, many AI companies still had risk profiles and business models resembling early-stage investment with large R&D budgets.
We have built our relationship with Anthropic over the past two years as it evolved from a ‘science experiment’ into a company with an emerging differentiated product proposition and fast-growing revenue.
We decided to invest when we started seeing this thesis come to life with three key developments:
- Anthropic’s margins have dramatically improved since its last funding round in March, strengthening our conviction in its long-term profitability.
- The success of Claude Code has demonstrated its ability to monetise AI capabilities effectively.
- We’ve seen continued evidence of its strength with enterprise customers, carving out a distinct market position.
We expect that enterprise customers will use AI models for more complex problems and, therefore, will place a higher value on increasing intelligence. This should allow Anthropic to monetise further technology advancements more effectively.
The risks are still significant – the technology is still evolving rapidly, and there is intense competition and uncertainty over the long-term value customers will place on AI. However, we believe that now is the time when we are getting enough clarity on the long-term path to profitability that Anthropic is charting to take a position.
What the future holds
The dizzying growth in AI valuations is another reason to take a pause. However, the speed of Anthropic’s revenue growth makes the investment less expensive than it seems at first sight. Our investment values the company at 20 times this year end’s forecast annualised revenue run rate (a projection of what Anthropic would earn yearly if its current sales continued at this rate) – on a par with cybersecurity company CrowdStrike, ecommerce platform Shopify or the cloud data warehouse operator Snowflake, despite their much slower revenue growth.
Investing at a $183bn valuation represents our belief that Anthropic can become one of the world’s greatest companies. We don’t know whether or when the AI boom will turn into a bubble. However, we know that the right companies can move beyond the turmoil to become the new generation of leaders – and we are backing Anthropic to be one of them.
For our clients, this represents exposure to one of our generation’s most significant technological shifts, backed by a company with the talent, technology and business model to capitalise on it.
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