A quiet but significant shift is taking place in Silicon Valley’s venture capital playbook. Sequoia Capital is reportedly joining a major funding round for Anthropic, the AI company behind Claude, a move that challenges long-standing norms in the venture industry.
Traditionally, venture firms avoid backing direct competitors in the same market, choosing instead to bet on a single winner. Sequoia’s reported decision stands out because the firm is already invested in OpenAI and Elon Musk’s xAI, and is now adding Anthropic to that list.
The development is notable given comments made last year by OpenAI CEO Sam Altman under oath. During testimony linked to a high-profile lawsuit involving Musk, Altman addressed speculation around OpenAI’s 2024 funding round. He denied that investors were broadly banned from backing rivals, but confirmed that those with ongoing access to OpenAI’s confidential information would lose that access “if they made non-passive investments in OpenAI’s competitors.” He described this as “industry standard” protection against the misuse of sensitive information.
According to a leading business newspaper, Sequoia is joining a funding round led by Singapore’s GIC and U.S.-based investor Coatue, each investing $1.5 billion. Anthropic is seeking to raise $25 billion or more at a $350 billion valuation, more than double its $170 billion valuation from just 4 months ago. Earlier reports from other financial news outlets had placed the round at $10 billion. Microsoft and Nvidia have committed up to $15 billion combined, while venture firms and other investors are expected to add $10 billion or more.
Sequoia’s ties to Altman go back years. The firm backed him when he dropped out of Stanford to start Loopt. Altman later served as a scout for Sequoia and introduced it to Stripe, now one of its most valuable investments. Sequoia co-leader Alfred Lin has also maintained a close public relationship with Altman and once said he would back Altman’s “next world-changing company” after his brief removal from OpenAI in November 2023.
Sequoia’s broader relationship with Musk has also shaped its investment choices. The firm has backed X, SpaceX, The Boring Company, and Neuralink, and its former leader was an early investor in Musk’s X.com, later part of PayPal.
The move contrasts sharply with Sequoia’s past stance. In 2020, the firm walked away from a $21 million investment in Finix after deciding it competed with Stripe, giving up its shares, board seat, and rights.
This reported Anthropic investment follows recent leadership changes at Sequoia, where Alfred Lin and Pat Grady took over after a surprise internal vote removed the firm’s global steward earlier this fall.
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