Israeli AI Startup Decart Nears $7 Billion Sale to Anthropic

An Israeli artificial intelligence startup that was valued at about $4 billion only three months ago is now reportedly on the verge of being acquired for roughly $7 billion by Anthropic, the American company behind the Claude AI chatbot.

The potential acquisition of Decart would be one of the largest-ever purchases of an Israeli technology company and the biggest known acquisition in Anthropic's history. The deal is reportedly approaching the signing stage, although it has not yet been finalized and could still change or fall apart.

The remarkable rise of Decart illustrates both the extraordinary pace of the artificial-intelligence industry and the growing importance of a problem that is less visible to consumers than increasingly sophisticated chatbots: how to make AI systems faster, cheaper and more efficient.

From $4 billion to $7 billion

Decart was founded in 2023 by Israeli entrepreneurs Dean Leitersdorf and Moshe Shalev. The company initially attracted attention for its work on making generative AI operate in real time, and it subsequently developed technology designed to squeeze considerably more performance out of the computer chips used to run AI models.

In May, Decart announced a $300 million funding round led by Radical Ventures. Nvidia, the world's dominant maker of AI chips, participated in the round along with investors including Adobe Ventures, Toyota Ventures, Atreides Management and others. The financing brought Decart's total funding to more than $450 million and valued the company at approximately $4 billion.

That valuation now looks modest.

Reports initially emerged in mid-August that Anthropic was negotiating to acquire Decart for approximately $6 billion. Reuters confirmed that the companies were in talks, while noting that the discussions were part of Anthropic's broader effort to expand its capacity as demand for its AI products grows.

Within days, however, Israeli business publication Calcalist reported that the negotiations had advanced significantly and that Decart could be valued at approximately $7 billion. The companies were reportedly exchanging advanced drafts of an acquisition agreement.

The increase would represent a dramatic jump from Decart's valuation in its May financing round.

Why does Anthropic want Decart?

The attraction appears to have less to do with a consumer-facing AI application and more to do with the enormous cost of operating artificial intelligence at scale.

Companies such as Anthropic spend vast sums on the computing power required to train and operate their AI models. Every improvement that allows a model to perform the same task with fewer computing resources can potentially translate into enormous savings.

Decart has developed software that is designed to optimize AI workloads and extract more performance from the hardware on which they run. The company says its systems can dramatically improve the efficiency of both AI training and inference - the process by which an already-trained model generates responses.

That technology could be particularly valuable to Anthropic as usage of its Claude models continues to expand.

Reuters Breakingviews noted that even relatively modest improvements in computational efficiency could be worth billions of dollars to a company operating AI systems on a massive scale. For Anthropic, reducing the amount of computing power required to deliver each AI response could improve margins while allowing the company to serve more customers without simply adding enormous amounts of additional hardware.

In other words, Decart could help Anthropic get more AI out of the same machines.

A second side to Decart

Decart is not solely an AI-infrastructure company.

It has also been developing what are known as "world models," AI systems designed to understand and generate interactive representations of environments. Unlike a conventional chatbot that primarily works with text, a world model attempts to represent how objects and environments behave and change over time.

Decart describes its technology as enabling real-time, interactive environments that could have applications in robotics, autonomous vehicles, manufacturing and drones. Its work also includes real-time video and image generation and transformation.

That technology could eventually become important far beyond entertainment. AI systems that can simulate physical environments could be used to train robots, test autonomous vehicles and generate synthetic environments for other forms of artificial intelligence.

The combination of these capabilities - more efficient AI computing and sophisticated real-time models - helps explain why Decart has attracted attention from some of the world's biggest technology companies.

Nvidia was also interested

One of the more intriguing aspects of the proposed transaction is the reported competition for Decart.

Nvidia, which already invested in Decart's May financing round, was reportedly interested in acquiring the Israeli company as well. According to Israeli reports, Nvidia's offer may actually have been higher than Anthropic's. Yet Decart's founders and major investor Sequoia Capital reportedly preferred Anthropic as the company's next home.

That would make the decision particularly notable. Nvidia is at the center of the global AI revolution, supplying many of the chips on which today's AI systems depend. Decart's technology, meanwhile, is designed in part to make AI workloads more efficient across different types of hardware.

Anthropic, by contrast, is itself one of the major competitors in the race to build increasingly capable AI models.

A strategic move before an IPO

The timing is also significant for Anthropic.

The company is preparing for a potential public offering, and acquiring technology that could reduce the cost of operating its AI systems would give investors another reason to believe that rapidly growing AI companies can eventually achieve attractive profit margins. Reports have suggested that Anthropic is targeting a major IPO later this year.

The Decart acquisition would therefore be more than a conventional startup purchase. It would give Anthropic additional expertise in the underlying technology needed to run AI at enormous scale.

Reports indicate that Decart's team would join Anthropic's inference and performance organization, putting the Israeli company's engineers directly into the effort to make Claude more efficient.

For Israel's technology sector, meanwhile, the prospective deal is another extraordinary example of how quickly a small Israeli startup can become strategically important to one of the world's most valuable technology companies.

Decart went from emerging from stealth with a $21 million Sequoia-led seed round to raising more than $450 million in total funding, reaching a $4 billion valuation, and now potentially being sold for close to $7 billion, all in roughly three years.

The deal is not done yet. But if Anthropic and Decart complete the transaction at the reported valuation, it will stand as a striking demonstration of Israel's continuing ability to produce companies with technology valuable enough to become essential components of the global AI race.