Sequoia Capital is about to make its first major investment in Anthropic, the AI company behind the Claude chatbot. In doing so, the well-known venture capitalist is breaking a long-standing unwritten rule in Silicon Valley: not to invest in direct competitors at the same time.
This was reported by TechCrunch based on coverage by the Financial Times. The investment is part of an exceptionally large financing round. Anthropic aims to raise $25 billion or more at a valuation of approximately $350 billion, more than double what it was a few months ago. The round is led by Singapore’s sovereign wealth fund GIC and investor Coatue, each contributing $1.5 billion. In addition, Microsoft and Nvidia are said to have committed up to $15 billion, with additional contributions from other investors.
Sequoia’s move is notable because the fund already has interests in OpenAI and xAI. Traditionally, venture capitalists avoid such portfolio overlap, partly to prevent conflicts of interest and information leaks. This tension was explicitly mentioned last year by OpenAI CEO Sam Altman, who testified under oath that investors with access to confidential OpenAI information could lose that access if they actively invest in competitors. Such agreements are considered standard protection for sensitive knowledge within the sector.
Against this backdrop, Sequoia’s new position is all the more remarkable. Moreover, the relationship between Sequoia and Altman goes back years. The fund supported Altman in his first startup and later played a role in his network around Stripe, one of Sequoia’s most successful investments. Alfred Lin, now co-leader of Sequoia, has also spoken openly and positively about Altman in the past.
Close ties with Elon Musk
Sequoia’s investment in xAI was previously seen as a departure from the classic VC approach, but was mainly interpreted within the sector as part of the broader ties between the fund and Elon Musk. Sequoia has long been involved with several Musk companies, including SpaceX and Neuralink.
Sequoia’s decision to embrace Anthropic now stands in sharp contrast to its previous choices. In 2020, the fund withdrew completely from payment startup Finix when it became apparent that it was competing with Stripe, even at the expense of an investment of tens of millions of dollars.
The change of course coincides with a power shift within Sequoia. Roelof Botha, who was critical of extreme valuations and passed on earlier Anthropic rounds, was sidelined last fall. Since then, Pat Grady and Alfred Lin have been determining the strategy.
Anthropic itself is growing rapidly. Its revenue is said to have increased tenfold in a year, partly thanks to AI tools for software developers. At the same time, the company is preparing for a possible IPO, which, according to sources, could take place as early as this year. Anthropic thus appears to be positioning itself as one of the key players in an AI market in which capital, scale, and strategic alliances are becoming increasingly decisive.