Sequoia to invest in Anthropic, breaking VC taboo on backing rivals: FT

Sequoia Capital to Join Blockbuster Funding Round for Anthropic

Reports from the Financial Times suggest that Sequoia Capital is set to participate in a significant funding round for Anthropic, the AI startup known for its creation Claude. This move is expected to make waves in Silicon Valley.

The decision is noteworthy as venture capital firms typically avoid investing in competing companies within the same sector, opting instead to focus on a single winner. However, Sequoia, already backing both OpenAI and Elon Musk’s xAI, is now adding its support to Anthropic as well.

The timing of this investment is surprising, especially considering statements made by OpenAI CEO Sam Altman last year. Altman addressed rumors about restrictions in OpenAI’s 2024 funding round, emphasizing the importance of preventing investors from making non-passive investments in OpenAI’s competitors.

According to the Financial Times, Sequoia will join a funding round led by Singapore’s GIC and U.S. investor Coatue, with each contributing $1.5 billion. Anthropic aims to raise over $25 billion at a valuation of $350 billion, more than double its valuation from just four months ago.

Sequoia’s connection to Altman dates back to his time at Loopt, where the firm initially backed him. This relationship has continued over the years, with Sequoia investing in companies like Stripe through Altman’s introductions.

While Sequoia’s investment in xAI may seem contradictory to traditional VC strategies, it is seen as a move to strengthen ties with Elon Musk rather than backing a direct competitor to OpenAI. Sequoia’s extensive history of investments in Musk’s ventures further solidifies this relationship.

Sequoia’s reported investment in Anthropic marks a departure from its historical stance on portfolio conflicts. In the past, the firm walked away from investments in companies like Finix to avoid conflicts of interest, demonstrating a willingness to prioritize ethical considerations.

The investment in Anthropic comes amidst leadership changes at Sequoia, with Roelof Botha stepping aside and new leaders taking charge. Anthropic is reportedly gearing up for an IPO in the near future.

For further details, we have reached out to Sequoia Capital for comment.