Sequoia Capital is making waves by funding Anthropic, an AI company, despite its investments in rival firms like OpenAI and xAI.
This is notable because of what OpenAI CEO Sam Altman said last year. In a legal case against Musk, he mentioned that investors with knowledge of OpenAI’s secret information would lose access if they invested in rivals. He called this standard practice to protect sensitive business info.
According to reports, Sequoia is part of a funding round led by GIC from Singapore and Coatue in the U.S. Each of these firms is contributing $1.5 billion. Anthropic is aiming to raise about $25 billion and plans to be valued at $350 billion, which is more than double the $170 billion valuation from just four months ago. Microsoft and Nvidia have also agreed to invest up to $15 billion together, with more funds expected from other investors.
Sequoia has a strong connection with Altman. They supported him when he left Stanford to start his company Loopt. Altman later helped Sequoia find Stripe, a company that became very valuable. Sequoia’s Alfred Lin and Altman seem to be friends, and Lin showed support for Altman during a difficult time at OpenAI in late 2023.
While Sequoia’s investment in xAI seems to break the usual rules, many believe it is more about getting close to Elon Musk, rather than just competing with OpenAI. Sequoia has invested in many of Musk’s projects, including SpaceX and Neuralink.
Sequoia’s new approach is surprising, especially since they previously pulled out of investing in Finix after deciding it competed with Stripe. They forfeited a $21 million investment, marking a rare move for the firm.
The news about Sequoia’s investment in Anthropic comes after significant leadership changes at the firm, where Roelof Botha was unexpectedly replaced. Anthropic is also getting ready for an initial public offering (IPO) soon. Sequoia Capital has not yet commented on their investment.