What Is AI Worth? U.S. VCs Break Tradition to Invest in Rival Firms

"We do not invest in competitors."

An unwritten rule long observed in the U.S. venture capital (VC) industry is being broken. Amid the artificial intelligence (AI) boom, a scramble not to miss out on investment opportunities is reshaping the industry's norms.

On the 16th (local time), Bloomberg News reported, citing people familiar with the matter, that "Altimeter Capital is set to invest more than 200 million dollars in Anthropic." It added that Sequoia Capital is also expected to participate in Anthropic's latest funding round. Both Altimeter and Sequoia have previously invested in OpenAI. Sequoia first invested in OpenAI in 2021 and has taken part in multiple subsequent funding rounds.

Bloomberg reported that this trend shows how a small number of top-tier AI developers are reshaping the venture investment landscape. Historically, Silicon Valley investors have typically picked one company and backed it over the long term, maintaining a strategy that avoided any appearance of conflicts of interest. However, as AI has triggered overheated competition among tech investors, these traditional practices are steadily losing influence.

This shift is spreading beyond VCs to big tech companies and large asset managers. Amazon, Nvidia, and Microsoft have discussed investing in both firms. In addition, Blackstone, the largest asset manager in the United States, is reviewing a plan to expand its stake in Anthropic to around 1 billion dollars, after its investment in OpenAI. MGX in Abu Dhabi, an OpenAI investor and a partner in the Stargate project, is also in talks to invest several hundred million dollars in Anthropic.

Ethan Choi, a partner at Khosla Ventures, which has invested in OpenAI, said, "OpenAI and Anthropic are generational companies that we may never see again in our lifetimes," adding, "In that kind of environment, some VCs are lowering their standards on conflicts of interest."

Bloomberg, however, pointed out that VCs that invest in competing firms at the same time could create problems for AI startups. After investing in rivals, backers might share internal secrets or prioritize one portfolio company over another, potentially harming the interests of the disadvantaged firm.

Despite such concerns, as the scope of AI continues to expand, related investments are becoming even more active. Some investors are backing multiple small startups that are targeting the same industry segment. For example, Khosla Ventures, a major investor in OpenAI, has invested in several coding-related AI startups, including Cognition, Replit, Lovable, and Emergent. Vinod Khosla, founder of Khosla Ventures, told Bloomberg in an email, "We view these companies as all targeting very different markets."

In addition, Sequoia Capital has invested in legal AI companies such as Harvey, Crosby, and Sandstone. Andreessen Horowitz has also put money into Abridge, an AI medical-records documentation startup. This came a few years after it invested in Ambience Healthcare, a competitor.

Still, for many investors, investing in multiple AI firms at once is seen as a choice worth the risk of provoking backlash from founders. Didi Das, a partner at Menlo Ventures, said, "If you try to invest in a competitor when you already have a winner in your portfolio, you risk damaging your relationship with that winner." She added, "Of course, you could also make a lot of money in return."