Sequoia Capital is reportedly participating in a significant funding round for Anthropic, the artificial intelligence startup behind Claude (according to the Financial Times). The move is notable in Silicon Valley, where venture capital firms traditionally shy away from backing competing companies in the same field, preferring to invest in a single winner. But Sequoia, which has already invested in both OpenAI and xAI , now appears to be backing Anthropic.
The timing is particularly significant given what OpenAI CEO Sam Altmanlast year. In defending OpenAI against Musk’s lawsuit, Altman addressed rumors about restrictions on OpenAI’s 2024 funding round. While he denied that OpenAI investors were prohibited from backing competitors, he acknowledged that investors with ongoing access to OpenAI’s inside information were told that access would be terminated if they made non-passive investments in OpenAI’s competitors. Altman described this as “industry standard protection” against the misuse of sensitive competitive information.
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According to the FT, Sequoia is participating in a funding round led by GIC and US investor Coatue, each contributing $1.5 billion. Anthropic is aiming to raise $25 billion or more at a valuation of $350 billion. The WSJ and Bloomberg had earlier reported that the round was worth $10 billion. Microsoft and Nvidia have committed up to $15 billion in total, with VCs and other investors said to be contributing another $10 billion or more.
Sequoia: Support for Anthropic and OpenAI?
Sequoia's relationship with Sam Altman runs deep. When Altman dropped out of Stanford to start Loopt, Sequoia backed him. He later became a "scout" for Sequoia, introducing the company to Stripe, which became one of the most valuable companies in its portfolio.
Additionally, Sequoia’s new co-chairman, Alfred Lin, and Altman appear to have a close relationship. Lin has interviewed Altman multiple times at Sequoia events, and when Altman temporarily stepped down from OpenAI in November 2023, Lin publicly expressed his desire to support “Altman’s next world-changing company.”
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Investments also in Elon M's xAI
While Sequoia’s investment in xAI may seem like a departure from the traditional VC approach to picking winners, this bet is seen more as an effort to deepen the company’s ties to Elon Musk (rather than as backing an OpenAI competitor). Sequoia invested in X when Musk bought Twitter and rebranded it. It’s also an investor in SpaceX and The Boring Company, and is a big backer of Neuralink, Musk’s brain-computer interface company.
Sequoia's longtime leader, Michael Moritz, was even an early investor in Musk's X.com, which became part of PayPal.
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Sequoia invests in competitors for the first time
Sequoia’s apparent turnaround in its portfolio (and its backing of rival companies) is particularly striking given its stance over the years. In 2020, the firm exited its investment in payments company Finix because the startup competed with Stripe. Sequoia exited the $21 million investment, allowing Finix to keep the money while giving up its board seat, information rights, and stock. It was the first time in the firm’s history that it had severed ties with a newly funded company due to a conflict of interest.
The reported investment in Anthropic comes after dramatic leadership changes at Sequoia, during which Roelof Botha.
