Sequoia Defies VC Norms to Back Anthropic in Bold Investment Move: FT

Why is this significant? Traditionally, venture capital firms avoid investing in competing companies within the same sector, usually backing a single winner. However, Sequoia’s move to support both OpenAI and Elon Musk’s xAI, along with Anthropic, defies this norm.

Surprisingly, this decision comes in the wake of statements made by OpenAI CEO Sam Altman during a legal deposition last year. Altman addressed rumors surrounding restrictions in OpenAI’s 2024 funding round, emphasizing the importance of preventing investors with access to sensitive information from supporting competitors actively.

According to the Financial Times, Anthropic is set to raise over $25 billion in a funding round led by Singapore’s GIC and U.S. investor Coatue, each contributing $1.5 billion. This valuation marks a significant increase from its previous valuation of $170 billion just four months ago.

The connection between Sequoia and Altman dates back, with Sequoia backing Altman’s ventures since his early days at Stanford. Their relationship has evolved over the years, with shared investments in groundbreaking companies like Stripe.

Despite Sequoia’s previous stance on avoiding conflicts of interest within its portfolio, the recent investment in xAI has been perceived as a strategic move to strengthen ties with Elon Musk’s ventures, including SpaceX and Neuralink.

The reported investment in Anthropic follows significant leadership changes at Sequoia, signaling a shift in the firm’s direction and priorities. With an impending IPO on the horizon, Anthropic’s future looks promising as it garners support from key players in the tech industry.

As Anthropic gears up for a potential IPO in the near future, the involvement of Sequoia Capital in its funding round underscores the company’s growth trajectory and industry impact.