Anthropic’s Claude 3 Launch Brings Real Competition to the AI Chatbot Race

Anthropic, a San Francisco AI startup, backed by well-known companies, like Google, Salesforce, and Amazon, recently announced the launch of Claude 3. This AI chatbot looks to shake up the market by offering advanced reasoning, vision analysis, code generation, and multilingual processing at affordable prices.

In this article, we’ll explore the technical updates to Claude 3, including the main features, the value proposition, and the pricing structure. We’ll also go through the background of Anthropic and touch on how FTX’s bankruptcy proceedings might impact how Anthropic shares trade on the secondary market, in the short term.

Anthropic’s Latest Launch: Claude 3

Anthropic has made significant changes to its primary consumer-facing product, Claude, over the past year, with Claude 3 first launching on March 14, 2023, and receiving a huge update in the form of Claude 3 more than a year later on  March 4, 2024. Claude 3 is Anthropic’s first multimodal AI suite, with the ability to analyze photos and charts in addition to text queries. Claude 3 can generate both text and charts but will refrain from generating images at the moment.

Claude 3 is available on Amazon and Google Cloud platforms. Anthropic is also selling Claude 3 directly to users in over 159 countries. Claude 3 has already gained an extensive client base, working with well-known companies, like Slack, Zoominfo, Asana, and Jasper.

The Main Features of Claude 3

Claude 3 takes Claude 2.1 a step further, adding value for users in numerous different ways. For one, Claude 3 can answer more “potentially harmful” questions that Claude 2.1 would have refused. The processing capabilities have also been expanded to pictures and graphs, a feature that some other AI chatbots do not offer.

In addition, Anthropic claims that Claude 3 will outperform competitors, like Google’s Gemini and OpenAI’s ChatGPT.

Anthropic has done research to back this claim using common AI evaluation benchmarks, like undergraduate-level expert knowledge (MMLU), graduate-level expert reasoning (GPQA), and basic mathematics (GSM8K). The below graphic shows Claude 3’s performance compared to other leading AI chatbots.

Users have already been testing out Claude 3’s capabilities and accuracy by running “needle in the haystack” scenarios. In one internal testing example, Claude 3 was not only able to pick out a sentence that didn’t belong with the rest of the text but also determined that the context was so out of place that it must have been intentionally inserted. This level of meta-awareness is new in the AI chatbot realm.

Claude 3’s Value Proposition

  • Anthropic positions Claude 3 using a few different pillars, including:
  • Security – Claude 3 has enterprise-grade security and data handling capabilities, including SOC II Type 2 and HIPAA compliance certifications.
  • Trustworthiness – Claude 3 is 10x more resistant to jailbreak and misuse, with copyright indemnity protections.
  • Capabilities – Claude 3 has a 200,000 token context window, tool use, and multimodal features.
  • Reliability – Claude 3 has very low hallucination rates and high accuracy rates with long documents.

Each of these segments positions Claude 3 as a potential leader in the AI chatbot space.

Claude 3’s Pricing Structure

Claude 3’s pricing structure is based on tokens, represented in millions (MTok). The below chart summarizes the pricing for the latest release:

Given Claude 3’s improvements and high scoring on the previously mentioned tests, its higher pricing may still make it a more compelling option than GPT4 or other models like Mistral or Llama.

Previous Claude Versions

Claude 3 follows Claude 100k (increased context window) and Claude 2.1. Below we briefly highlight these prior iterations to catalog improvements to Antrhopic’s model.

Claude 100k (Amazon Bedrock Edition)

Claude 100k is an AI assistant with a combined context of 100,000 tokens. This version of Claude can handle a variety of conversational and text-processing tasks with high precision and reliability. Common use cases include collaborative writing, Q&A, coding, summarization, and research. Claude 100k is available on Amazon Bedrock, which is the managed service that facilitates Amazon Web Services (AWS).

Claude 2.1

Claude 2.1 further advanced Anthropic’s vision to be the most powerful chatbot. This version of Claude redesigned the Workbench product, which is a feature that allows developers to interact and experiment with AI on a project-by-project basis. The goal of Claude 2.1 is to align the use of AI with the specific needs of business owners.

On November 21, 2023, Claude 2.1 was updated to include a context window and expanded data processing. This update doubled the number of tokens that Claude 2.1 was able to interpret to 200,000 and added beta support for third-party APIs. These token levels are significantly higher than the 32,000 token limit of other AI versions, like GPT-4. In addition, the rate of false statements decreased by 2x, meaning Claude 2.1 is less likely to hallucinate an answer.

About Anthropic

Anthropic was founded in 2021 by ex-OpenAI research executives Daniela Amodei and Dario Amodei. Other key employees in Anthropic include Jack Clark, Jared Kaplan, Sam McCandlish, and Tom Brown. The leadership team and employees bring diverse backgrounds to Anthropic, particularly in the machine learning, physics, policy, and product spheres.

Anthropic, being coined as one of AI’s hottest start-ups, has raised over $7 billion in funding from investors. This includes solidified funding agreements from major AI investors, like $2 billion from Google, $4 billion from Amazon, and $750,000 from Menlo Ventures. With the amount of capital Anthropic has raised, the company is seeking a valuation upwards of $18 billion.

Over the past few years, Anthropic has been able to grow its employees, customer base, and intangible property. Co-founder Daniela Amodei describes that Claude 3 has around 150 active team members contributing to the project.

Anthropic and FTX’s Bankruptcy

While seemingly unrelated, FTX plays a key role in Antrhopic’s valuation in the short term. FTX was a cryptocurrency exchange that declared bankruptcy due to fraud-ridden operations. FTX and its sister investment firm, Alameda, invested $500 million into Anthropic in 2021. Due to the bankruptcy proceedings, FTX is planning to sell its 8% stake in Anthropic to repay shareholders. Presiding Bankruptcy Judge John Dorsey has already approved the sale.

What does this mean for Anthropic? The sale of FTX shares in Anthropic could lead to a short-term dip in secondary market pricing on Anthropic shares, depending on the dynamics of that sale. However, any dip could be short-lived, dependent on when the company raises another primary round of financing at a new, and presumably higher, valuation.

How Does Antrhopic Compare to OpenAI as an Investment?

While a deep dive around the investment case between Anthropic and OpenAI is beyond the scope of this article, there are a few reasons why one might prefer to invest in Antrhopic rather than OpenAI, despite OpenAI currently being the category leader. Those include:

While this list is anything but exhaustive, it presents some reasons why some investors might prefer an investment in Anthropic versus OpenAI at this moment in time.

Summary & Conclusion

The launch of Claude 3 positions Anthropic as a credible challenger to ChatGPT. Whether that status will remain durable when OpenAI inevitably updates its models, remains to be seen. But for now, it appears Claude can outperform ChatGPT in some tasks. Competition is always a good thing and both investors and AI users are likely happy to see Antrhopic challenge OpenAI and Google for AI supremacy.

If you are an accredited investor interested in purchasing Anthropic shares, click the link and inquire to see if UpMarket currently has shares available. For more information surrounding pre-IPO, private equity, and other investment opportunities, check out our other posts.

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