Sequoia To Back Anthropic Despite Stakes in OpenAI, xAI

Sequoia Capital is reportedly joining a huge funding round for the artificial agency company Anthropic, where it is planning to raise $25 billion or more, according to a Financial Times report.

This news comes as a surprise as the VC group is currently backing Anthropic’s rivals like OpenAI and Elon Musk owned xAI. Historically venture firms do not invest in competing companies while backing a firm from a similar sector, they usually choose one to avoid conflicting interests.

Th report said that in the funding round led by Singaporean sovereign wealth fund GIC and US investor Coatue, which are contributing $1.5bn each.

It also said that the Claude maker was aiming to raise in total a deal that doubles the value of the company than its current valuation at $170 billion. Tech giants Microsoft and Nvidia are also set to invest upto $15bn in total, with venture capitalists and other investors contributing another $10bn or more, it added.

The scale of the proposed fundraise underlines the intensifying race among leading AI labs to secure long-term capital for model training, compute infrastructure, and global expansion. As foundation models grow larger and more expensive to develop, access to sustained funding has become a key competitive advantage in the generative AI market.

Leadership Change

This also comes after a change in top leadership at Sequoia where Pat Grady and Alfred Lin were elected to take over the firm, ousting Roelof Botha. Sequoia’s current approach contrasts sharply with its earlier position on portfolio conflicts. In 2020, the firm exited its investment in payments startup Finix after concluding that the company competed with Stripe. Sequoia walked away from its $21 million stake, surrendered its board seat and information rights, and allowed Finix to retain the capital.

At the time, Sequoia’s exit was viewed as a rare example of a venture firm taking a firm stand on potential conflicts, reflecting its long-held strategy of choosing one clear market leader per category. Its reported participation in Anthropic’s funding round points to a shift in that thinking, as AI investing increasingly demands larger capital commitments across fewer, dominant players.

The development is notable given OpenAI CEO Sam Altman’s sworn testimony last year. Addressing claims linked to Elon Musk’s lawsuit, Altman said OpenAI’s 2024 funding round did not broadly bar investors from backing rival AI firms.

However, he confirmed that investors with continued access to OpenAI’s confidential or competitively sensitive information would lose that access if they made non-passive investments in competing companies. Altman told the court this safeguard is an industry-standard practice designed to prevent misuse of sensitive information.

Anthropic is said to be preparing for a potential initial public offering as early as this year. Recently the startup appointed Irina Ghose as Managing Director for India, which is currently Anthropic’s second-largest market worldwide for Claude.ai usage. CioL also reported Anthropic’s CEO Dario Amodei and senior executives will visit India in February to formally open the company’s Bengaluru office and participate in the India AI Impact Summit.

Anthropic’s move in India reflects a broader push beyond the US, with the company focusing on enterprise customers and developer adoption in overseas markets. As generative AI gains traction across industries such as IT services, banking, and customer support, India is becoming an important market for AI companies expanding global usage and partnerships.