Sequoia backs Anthropic in massive funding round despite AI portfolio conflicts

Sequoia Capital is reportedly joining a major new funding round for Anthropic, the artificial intelligence startup behind Claude, in a move that is likely to spark debate across Silicon Valley.

According to the Financial Times, the venture capital giant is participating in a round led by Singapore sovereign wealth fund GIC and US investor Coatue, each of which is contributing $1.5 billion. Anthropic is aiming to raise $25 billion or more at a valuation of around $350 billion, more than double the $170 billion valuation it achieved just four months ago.

The reported investment is notable because Sequoia has already backed two of Anthropic’s direct competitors, OpenAI and Elon Musk’s xAI. Venture capital firms have traditionally avoided investing in multiple rival companies within the same sector, preferring to pick a single winner to minimise conflicts of interest.

The timing also stands out in light of comments made by OpenAI chief executive Sam Altman last year. During legal proceedings related to Musk’s lawsuit against OpenAI, Altman said that investors with access to OpenAI’s confidential information could lose that access if they made non-passive investments in competing companies, a restriction he described as standard industry practice.

Earlier reports from the Wall Street Journal and Bloomberg had suggested that Anthropic was seeking around $10 billion in fresh capital. The FT now says the final total could be far higher, with Microsoft and Nvidia together committing up to $15 billion, and venture capital firms contributing an additional $10 billion or more.

Sequoia’s relationship with Altman goes back years. The firm backed his first startup, Loopt, when he was still a Stanford student, and later worked closely with him during his tenure as a Sequoia scout. The firm also became an early investor in Stripe through an introduction from Altman, a deal that turned into one of its most successful bets.

While Sequoia has already invested in xAI, that move has largely been viewed as part of its broader long-term relationship with Musk rather than a direct competitive wager. The firm has backed several Musk ventures, including SpaceX, Neuralink, The Boring Company and X, formerly Twitter.

Still, the Anthropic investment appears to mark a significant shift from Sequoia’s earlier approach to conflicts. In 2020, the firm famously exited payments startup Finix after determining it competed with Stripe, forfeiting a $21 million investment to avoid a conflict of interest.

The reported deal also comes amid leadership changes at Sequoia, where longtime global head Roelof Botha stepped aside late last year, with Alfred Lin and Pat Grady taking over as co-leaders.

Anthropic is said to be preparing for a potential initial public offering as early as this year. Sequoia Capital has not yet commented publicly on the reported investment.