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

Sequoia Capital is reportedly joining a blockbuster backing circular for Anthropic, the AI startup down Claude, according to the Financial Times. It’s a determination definite to crook heads successful Silicon Valley.

Why? Because task superior firms person historically avoided backing competing companies successful the aforesaid sector, preferring to spot their bets connected a azygous winner. Yet here’s Sequoia, already invested successful some OpenAI and Elon Musk’s xAI, present throwing its value down Anthropic, too.

The timing is peculiarly astonishing fixed what OpenAI CEO Sam Altman said nether oath past year. As portion of OpenAI’s defence against Musk’s lawsuit, Altman addressed rumors astir restrictions successful OpenAI’s 2024 backing round. While helium denied that OpenAI investors were broadly prohibited from backing rivals, helium did admit that investors with ongoing entree to OpenAI’s confidential accusation were told that entree would beryllium terminated “if they made non-passive investments successful OpenAI’s competitors.” Altman called this “industry standard” extortion (which it is) against misuse of competitively-sensitive information.

According to the FT, Sequoia is joining a backing circular led by Singapore’s GIC and U.S. capitalist Coatue, who are each contributing $1.5 billion. Anthropic is aiming to rise $25 cardinal oregon much astatine a $350 cardinal valuation — much than treble its $170 cardinal valuation from conscionable 4 months ago. The WSJ and Bloomberg had earlier reported the circular astatine $10 billion. Microsoft and Nvidia person committed up to $15 cardinal combined, with VCs and different investors said to beryllium contributing different $10 cardinal oregon more.

The Sequoia transportation with Altman runs deep. When Altman dropped retired of Stanford to commencement Loopt, Sequoia backed him. He aboriginal became a “scout” for Sequoia, introducing the steadfast to Stripe, which became 1 of the firm’s astir invaluable portfolio companies. Sequoia’s caller co-leader Alfred Lin and Altman besides look comparatively close. Lin has interviewed Altman galore times astatine Sequoia events, and erstwhile Altman was concisely ousted from OpenAI successful November 2023, Lin publically said he’d eagerly backmost Altman’s “next world-changing company.”

While Sequoia’s concern successful xAI mightiness look to person already contradicted the accepted VC attack of picking winners, that stake is wide viewed arsenic little astir backing an OpenAI rival and much astir deepening the firm’s extended ties to Elon Musk. Sequoia invested successful X erstwhile Musk bought Twitter and rebranded it, is an capitalist successful SpaceX and The Boring Company, and is simply a large backer of Neuralink, Musk’s brain-computer interface company. Longtime Sequoia person Michael Moritz was adjacent an aboriginal capitalist successful Musk’s X.com, which became portion of PayPal.

Sequoia’s evident reversal connected portfolio conflicts is particularly glaring fixed its humanities stance. In 2020, the steadfast took the bonzer measurement of walking distant from its concern successful payments institution Finix aft determining the startup competed with Stripe. Sequoia forfeited its $21 cardinal investment, letting Finix support the wealth portion giving up its committee seat, accusation rights, and shares, marking the archetypal clip successful the firm’s past it had severed ties with a recently funded institution implicit a struggle of interest. (Sequoia had led Finix’s $35 cardinal Series B circular conscionable months earlier.)

The reported Anthropic concern comes aft melodramatic enactment changes astatine Sequoia, wherever Roelof Botha was pushed retired successful a astonishment ballot conscionable days aft sitting down with this exertion astatine TechCrunch Disrupt, with Lin and Pat Grady — who’d led that Finix woody — taking over.

Anthropic is reportedly preparing for an IPO that could travel arsenic soon arsenic this year. We’ve reached retired to Sequoia Capital for comment.