AI Startup Deal Collapse Linked to Relocation Demands, IPO Concerns

A potential $6 billion acquisition of Israeli AI startup Decart by Anthropic has fallen through, ending weeks of intense negotiations. The deal, which would have significantly boosted Israel's standing in the AI field and made Decart's founders billionaires, was reportedly called off by Anthropic after the completion of its due diligence process and the signing of a Letter of Intent.

Several possible reasons for the deal's collapse are being considered. One theory suggests Anthropic was not sufficiently impressed with Decart's language model optimization technology, or that they believed they could develop similar technology in-house or acquire it for less. Another possibility is that Decart's business, which has undergone significant changes, was deemed too small for the acquiring company, although acquisitions of this nature are typically driven by unique technology.

However, sources close to Decart believe Anthropic was enthusiastic about the technology but insisted on relocating the company's core operations, including much of its research and development talent and intellectual property, from Tel Aviv to San Francisco. The Decart founders, including brothers Dean and Oryan Leitersdorf and Moshe Shilo, reportedly refused this demand, preferring to keep the company based in Israel.

Anthropic, which is preparing for a significant IPO in the coming weeks with a target valuation of $2 billion, may also have been concerned about the timing of such a large acquisition. The company might have feared that the deal could negatively impact its stock price, especially if existing shareholders decided to sell shares once lock-up periods expired. It is possible both parties decided to postpone the acquisition until after Anthropic's market debut.

Neither Anthropic nor Decart have officially commented on the reasons for the deal's termination. The acquisition would have involved the relocation of approximately 100 employees from Decart's Israeli development center to California.