AI Startup Decart Deal Collapses Over Talent Relocation Demand

Negotiations for the acquisition of Israeli AI startup Decart by Anthropic, valued at $6 billion, have collapsed. The deal fell apart despite advanced due diligence and a preliminary agreement, with sources close to Decart blaming Anthropic's demand to relocate the company's core operations and talent to San Francisco.

According to Bloomberg, Anthropic initiated the termination of the deal late in the process, after completing due diligence and signing a Letter of Intent. While Anthropic has not commented, potential reasons for the collapse include dissatisfaction with Decart's technology, the possibility of developing similar technology in-house or acquiring other companies at a lower cost, or that Decart's business was deemed too small. However, Decart's founders, brothers Dean and Oryan Leitnerdorf and Moshe Shilo, are reportedly convinced that Anthropic was impressed by their technology but balked at the relocation demand.

The founders preferred to keep Decart, which focuses on optimizing language models and developing its own models, based in Tel Aviv. Anthropic, however, sought to move a significant portion of Decart's talent and intellectual property to California, a request the founders refused. This demand comes as major AI companies like OpenAI and Anthropic concentrate their core development in San Francisco.

Decart's Israeli development center employs approximately 100 individuals, who Anthropic reportedly expected to relocate to California. The collapse also occurs as Anthropic prepares for a potential IPO in the coming weeks, with some speculating that the company may have been hesitant to undertake a major acquisition before going public or feared a subsequent drop in its stock value.

Neither Anthropic nor Decart have officially commented on the failed acquisition.