Why we backed Anthropic
The enterprise foundation layer has cloud-level TAM—here's our thinking on its next market leader.
Sameer Dholakia, Byron Deeter, Grace Ma, Alex Yuditski & Sam Bondy
Published on Oct 22, 2024
Today, as Anthropic debuts its new Claude 3.5 Haiku model, upgraded Claude 3.5 Sonnet model, and a public beta that offers computer use, we are excited to share our thinking behind our prior investment in the company, deepening our commitment to the future of generative AI.
Daring to compete in a market of hyperscalers is no easy feat. Yet as students of the public cloud market, we’ve been on the hunt for another market that has the likelihood to achieve commensurate total addressable market (TAM)—and for a team that has the technical rigor, execution chops, and distribution strategy to become a market leader. That market is the foundation model layer, and that team is Anthropic.
The best foundation model developers make an essential ingredient to technological progress in the AI era: if oil powered the Industrial Revolution, intelligent models will power the AI Revolution.
Anthropic has created admirable moats of defensibility: the team has not only raised billions from the very hyperscalers we thought would dominate the field, but has also assembled a world-class team to deliver on its clear distribution advantage.
Claude, Anthropic’s core foundation model and AI assistant, has seen significant enterprise adoption—since its public launch in March 2023, Anthropic has announced partnerships with Amazon and Google, distributing Claude on Google Vertex and Amazon Bedrock. Claude is also differentiated from competitors in its model customization and safety features—Anthropic integrates its core models with clients' key data sources, yet it never trains its models on that data.
While the consumer adoption of generative AI has been astronomical since the public launches of ChatGPT and Claude, the enterprise opportunity has just begun. And while the cloud represents a shift of existing spend from on-premises to software-as-a-service (SaaS), we can foresee a world in which every application (B2B and B2C) will rely on an AI brain, representing tens of billions of dollars in potential revenue.
The integration of AI into every facet of B2B and B2C applications mirrors pivotal platform shifts like the internet, mobile communications, and SaaS. AI is set to become the central nervous system of applications across industries, dramatically reshaping not just the software sector but additional software-enabled markets worldwide. Given the competitive moats on data, distribution, and capital, only a few large foundation models will compete for the majority of billions of dollars of spend. Our bet is on the market-leading product and team at Anthropic.
Leading Anthropic is a group of visionaries, spearheaded by CEO Dario Amodei, former research leader at OpenAI, and president Daniela Amodei, former safety and policy leader at OpenAI. Anthropic has assembled a team of industry experts in frontier AI research, policy and safety initiatives, and enterprise product management, deftly balancing important ethical questions and cutting-edge techniques with valuable applications.
AI safety is central to Anthropic’s mission: the company’s research team built an in-house constitution to align its language model with human values, as a transparency measure for its complex AI systems, and pioneered publishing a Responsible Scaling Policy that helps the company incorporate safety research into advanced model capabilities, incentivizing the development of AI models that are just as powerful as they are safe for public use. Unlike generic AI solutions, Anthropic enables businesses to tailor AI models to their unique needs, data, and use cases, allowing for a deep understanding of industry-specific terminology and challenges. This approach not only enhances AI effectiveness but also ensures better data privacy and security, empowering businesses to fully leverage AI while maintaining their competitive edge.
Bessemer's investment is a commitment to the future of AI. Through this partnership, we are not just fostering a company but championing a paradigm shift in technology that promises to be as (or more) impactful as the internet and cloud revolutions. Anthropic is at the forefront of this change, ready to reshape how our world interacts with AI, influencing industries and economies globally.
If you are a builder in AI infrastructure, email us at aiInfra@BVP.com. Learn more about our AI roadmap and check our latest AI and data infra market map.
Contributors
Sameer Dholakia
Partner
Sameer Dholakia is a partner of the growth investment practice at Bessemer, where he focuses on GenAI and Physical AI investments.
Before starting his second career in Venture Capital in 2022, Sameer spent 25 years as an operator, building software companies. His most recent role was as the CEO of Bessemer-backed, SendGrid, which he joined in 2014. He accelerated the company’s growth and led SendGrid through a successful IPO in 2017 and subsequent acquisition by leading cloud communications platform Twilio for approximately $3 billion in early 2019.
Before joining SendGrid, Sameer served as GM of the Cloud Platforms Group at Citrix, which he joined following its acquisition of his first startup, VMLogix.
Sameer earned a B.A. in economics and a M.A. in organizational studies from Stanford University. He also holds an M.B.A. from Harvard Business School.
Outside of work, Sameer most treasures his time with his wife, Laura, and their two kids. He enjoys traveling, watching sports, and trying to improve his golf game. He also supports philanthropic efforts at Pledge 1% and is the Board Chair of the Menlo School Board.
Byron Deeter
Partner
Byron Deeter is a leading investor in AI, Cloud, Frontier Technology, and the Business of Sports. He co-authored Bessemer’s iconic 10 Laws of Cloud Computing, the Bessemer Forbes Cloud 100, the BVP Nasdaq Emerging Cloud Index, and Bessemer’s STRIVE program for executive health and wellness. Byron works closely alongside many of the best founders in the cloud world, with 26 of Byron’s investments currently valued above $1 billion each, including 13 IPOs and counting.
Byron first raised a Series A with Bessemer back in 2000, as CEO and founder of Trigo Technologies. His company grew to be one of the first global SaaS companies, reaching profitability and was successfully sold to IBM. Byron foresaw that cloud computing would not only change the way people built new technologies but also how The Cloud would systematically run the world. In 2005, Byron returned to Bessemer, this time to help lead the firm’s global cloud practice.
Byron graduated with honors from The University of California, Berkeley, where he met his then college sweetheart and now wife. Byron is a perennial Midas List investor, past Chairman of the National Venture Capital Association, partner/owner of the San Francisco 49ers and Leeds United, as well as an active board member/advisor to numerous causes including the U.S. Olympic & Paralympic Foundation, U.C. Berkeley Foundation, Pledge 1% and Cal Rugby. Although he’s a four-time Rugby Collegiate National Champion and serial Ironman finisher, he’s largely converted to leisure sports of golf, wake surfing, and skiing with his wife and three children.
Grace Ma
Investor
Grace is an investor with Bessemer’s growth investment practice in San Francisco, where she primarily focuses on AI and software investments.
Prior to joining Bessemer, Grace was an Associate at Centana Growth Partners, where she worked on early-stage growth investments in software and fintech. She was also previously at Oliver Wyman as a strategy consultant, advising Fortune 500 companies in M&A, organizational effectiveness, and growth strategy.
Grace earned her B.S. from the University of California, Berkeley, where she majored in Business Administration and minored in Public Policy. Outside of work, Grace enjoys Pilates, traveling, and following the latest in F1.
Alex Yuditski
Vice President
Alex is a vice president with Bessemer’s growth investment practice where she primarily focuses on AI and cloud software investments.
Prior to joining Bessemer, Alex was an investor at Blue Owl Capital and focused on growth investments in 6sense, Brex, JumpCloud, Nuvemshop, Nylas, Kajabi, Klaviyo, Replicated, Robinhood, and Split. Prior to joining Blue Owl Capital, Alex was an investment banker in William Blair’s software M&A group and Regions Securities’ leveraged finance group.
Alex holds a bachelor’s degree in economics from Wake Forest University. Outside of work, you can find Alex cheering on the New York Giants, cooking, and spending time with friends and family.
Sam Bondy
Vice President
Sam is a vice president based out of San Francisco and primarily focuses on early and growth stage cloud and AI.
Prior to venture capital, Sam began his career in Technology, Media, and Telecommunications investment banking at J.P. Morgan where he focused on M&A and capital markets transactions for both private and public companies. He then joined Harvest Partners, a private equity firm in New York, focusing on software and business services buyout. Most recently, Sam moved into earlier stage investing where he worked at Soma Capital primarily focusing on software and fintech.
Sam grew up in New York City and first attended McGill University in Montreal, before graduating summa cum laude from SUNY Binghamton where he received a B.A. in Economics. Outside of work, he is an aspiring outdoorsman, a (very) novice golfer, skier, surfer, and loves to run, read, travel, and listen to podcasts.
