How to Invest in Anthropic and Claude

Anthropic’s core product is Claude, a large language model (LLM) that competes with OpenAI’s ChatGPT and xAI’s Grok, among others. Anthropic is a privately held company . Its stock is not traded on any public market, nor is it subject to SEC oversight and disclosure rules. As a result, only accredited investors and institutions can freely trade shares. They must negotiate each trade individually, either with third parties or the company itself.

If you would like to invest in this AI company, the most accessible way to get exposure may be to invest in public companies and assets that are linked to the private company in some way. This way, while you may not have invested in it directly, your money is still exposed to the success (or risks) of Anthropic.

A financial advisor can help you determine the best path to get exposure to private companies that fit your portfolio. You can get matched with a financial advisor for free.

What Is a Private Company?

A private, or privately held, company is one whose shares are not traded on publicly regulated markets like the New York Stock Exchange or the NASDAQ . These companies are not subject to the same SEC reporting and oversight requirements of a publicly traded company. However, in exchange, they can't access the funds of general investors. Instead, private stock can only be freely traded by accredited or institutional investors.

Private stock is directly traded between individuals, which means it tends to be relatively low-volume. Investors don't have the same kind of liquidity with a private stock that they do with public shares, nor do they get the same kind of pricing and risk information generated by a high-volume market. Perhaps most importantly, they don't receive the same kind of legally verified information that a public company must disclose.

All this, said Robert Hodgins, founder of Sand Hill Road Technologies Fund , creates a very different risk profile for private companies than public ones. Investing in a private company "can be a smart and potentially rewarding choice," he said, "but it's important to approach it thoughtfully."

"With less regulatory oversight, there's a higher level of risk, making it crucial to do thorough research and be prepared for a long-term commitment," said Hodgins. "While these investments can add diversity to your portfolio and offer significant returns, they're best for those who are well-informed and comfortable navigating the complexities and risks involved."

While only accredited investors can directly expose themselves to these higher risks by purchasing shares in Anthropic, it's an important factor in any investments meant to get exposure to a private company, as well.

How to Get Portfolio Exposure to Anthropic

There are many ways to invest around Anthropic and its flagship AI product Claude. Three good overall approaches are:

• Invest in companies that have invested in Anthropic
• Invest in companies that use Claude
• Invest in the AI space generally

"Investing in and around private companies is not something that the everyday-investing public is familiar with," said Matt Willer, Partner at Phoenix Capital Group . "And frankly it’s not for everyone as there are different risk profiles, liquidity profiles, and other factors that may make these types of investments less suitable for the average investor." (Disclosure: Willer is an investor and advisor to the AI startup StickyStore.ai.)

"However," he said, "for the risk-oriented portion of a portfolio, these can be interesting opportunities… [And] while direct opportunities into that entity may be challenging to access for the average investor, tangential opportunities are not."

Invest In Investors

Perhaps the most direct way to invest in Anthropic is by investing in public companies that have, themselves, invested in Anthropic. This way, you will see their returns reflected to some degree in your own holdings.

The largest example of this is Amazon (AMZN), which has invested $4 billion in Anthropic and which intends to use its AI products throughout the company's many services. By purchasing shares of Amazon, you can get exposure to Anthropic's returns, filtered through Amazon's share of any profits. Similarly, major technology players like Google (GOOG) and Salesforce (CRM) have invested hundreds of millions of dollars into the AI company, creating the same trickle-up opportunity.

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Invest in Customers

Anthropic's main product is Claude, a chatbot that the company hopes will find additional applications as an agent and digital assistant. Like most AI tools, if successful this will have potential applications for countless digital and online companies alike.

For an investor, then, a potentially valuable option is to invest in Anthropic's customers . Many of these customers are not publicly traded companies and are, themselves, technology-area startups. However established firms like Intuit (INTU) also use Claude in their operations. In addition, Anthropic has launched a venture capital fund to invest in companies and provide them with access to Claude. By paying attention to the firms that use or partner with Anthropic, you can look to invest in the technology's long-term success.

Invest in the AI Space

Finally, you can invest in the artificial intelligence space in general. Almost every major technology company is investing in artificial intelligence, either by developing their own models or buying a share of major AI firms.

This creates an opportunity. Whether you choose to invest in Apple for its announced AI-powered iOS features or Google for its experimental artificial intelligence search, there are many ways to invest in AI. Meta , Tesla , Nvidia also have varying degrees of AI exposure.

This is particularly valuable with artificial intelligence given the technology's broadly shared systematic risks and opportunities. From new applications and products to lawsuits that challenge the underlying nature of AI itself, every company in this field has a direct stake in the fortunes of all others. One company's success may be shared across the field to one degree or another, just as with risk.

The AI space is in constant development. Consider consulting a financial advisor to evaluate your AI investment options.

The Bottom Line

Anthropic is an artificial intelligence company with a flagship product Claude. This company is private at time of writing, meaning that only accredited and institutional investors can freely trade its stock. However, there are many ways that you can still invest around the success or failure of this company.

Tips On Tech Investing

• When we suggest investing in the AI space, we mean it. There are lots of ways to buy into this tech. Let's take a look at how you can start investing in AI, and what kind of risks you should consider, in our pimer on the subject.
• Money is always in motion. Sign up for the Market Minute newsletter to get stock market news that may affect potential investments.
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Photo credit: Grok

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