Prosecutors Seek To Block SBF From Bringing Up Anthropic AI’s Burgeoning Value During Trial

Updated: 09 October 2023

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Don’t invest unless prepared to lose all the money you invest. This is a high-risk investment, you shouldn’t expect to be protected if something goes wrong.

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Assistant US Attorney Thane Rehn has filed a motion asking Judge Lewis Kaplan to block Sam Bankman-Fried (SBF) from bringing up Anthropic in his trial, claiming the growth of his investment in the company is “immaterial.”
US Prosecutors Want To Block Anthropic AI In Ongoing SBF Trial

The prosecutors allege that Bankman-Fried used customer funds to make a $500 million investment in Anthropic, an artificial intelligence company involved in a deal with Amazon worth as much as $4 billion. Bankman-Fried invested around $500 million in Anthropic in April last year.

According to the filing, the valuation of Anthropic has grown to between $20 billion and $30 billion, and a Bloomberg report says the company is also in talks for an additional $2 billion in funding from Google.

OpenAI rival Anthropic is still raising $2 billion after Amazon committed $1.25 billion last week, and Google is expected to invest at a valuation of between $20 billion and $30 billion; FTX Invested $500m in 2022 and the community believes that it can help creditors recover more…

— Wu Blockchain (@WuBlockchain) October 4, 2023

Anthropic’s growth has led to optimism among FTX creditors that Bankman-Fried’s investment will now have swelled considerably, raising their hopes of receiving greater compensation following the demise of FTX last year. Still, prosecutors assert there is no reason to submit evidence of Anthropic’s current valuation during the trial.

They noted that the defense should only mention the current value of this investment to support an argument of FTX customers being made whole.

“The indictment alleges that the defendant committed wire fraud by misappropriating FTX customer deposits to make investments and other expenditures. It is immaterial whether some of those investments might ultimately have been profitable,” the filing said.

Rehn opined that venture capital investments are speculative. He gave an example of FTX, whose valuation grew from around $18 billion in 2021 to approximately $32 billion in 2022. However, by the end of 2022, the company’s shares were worth nothing.

The prosecutors further said that if Anthropic’s valuation and recent funding rounds were admitted to evidence, it would necessitate a mini-trial. This mini-trial would focus on the value of assets available through bankruptcy and the extent to which the recovered assets will cover customer and creditor losses.

SBF’s Defense Takes The Blow After Gary Wang’s Testimony

FTX co-founder, Gary Wang, gave damning testimony when he took the stand last week. On October 5, Wang admitted to committing wire, commodities, and securities fraud alongside Bankman-Fried and Caroline Ellison.

Wang returned to the stand on October 6 and said that FTX’s $100 million insurance fund set up in 2021 was a fabrication. The fund never contained FTX’s native FTT tokens, as the exchange claimed.

From yesterday's exhibits in US v. Sam Bankman-Fried:

The prosecution shows that the "insurance fund" that FTX bragged about was fake, and just calculated by multiplying daily trading volume by a random number around 7500 pic.twitter.com/EDiVPOHODP

— Molly White (@molly0xFFF) October 7, 2023