Sequoia Capital is reportedly investing in Anthropic, the AI company behind the Claude series of large language models, marking a significant shift in venture capital norms. According to the Financial Times, the move breaks a long-standing industry taboo: traditionally, VCs have avoided backing multiple players in the same competitive space, preferring to concentrate on a single “winner” to avoid conflicts of interest and protect sensitive information. Sequoia’s new investment in Anthropic is especially surprising given its existing stakes in two of the company’s main rivals—OpenAI and Elon Musk’s xAI. This raises questions about how the firm will manage potential conflicts, particularly in light of OpenAI CEO Sam Altman’s testimony under oath last year. During OpenAI’s legal defense against Musk’s lawsuit, Altman acknowledged that investors with access to confidential information were warned their access would be cut off if they made non-passive investments in OpenAI’s competitors. He described this as an “industry standard” safeguard. According to the FT, Sequoia is joining a major funding round led by Singapore’s GIC and U.S. investor Coatue, each contributing $1.5 billion. Anthropic is aiming to raise $25 billion or more at a $350 billion valuation—more than double its $170 billion valuation just four months prior. While earlier reports from the Wall Street Journal and Bloomberg cited a $10 billion round, the new figures suggest a far more ambitious fundraising effort. Microsoft and Nvidia have committed up to $15 billion combined, with venture capital firms and other investors expected to contribute another $10 billion or more. Sequoia’s relationship with Altman runs deep. The firm backed him early on, investing in Loopt when Altman left Stanford. He later served as a “scout” for Sequoia, introducing the firm to Stripe, which became one of its most valuable holdings. Sequoia’s new co-leader, Alfred Lin, has maintained a close connection with Altman, frequently interviewing him at firm events. When Altman was briefly ousted from OpenAI in November 2023, Lin publicly stated he would eagerly support Altman’s “next world-changing company.” While Sequoia’s investment in xAI has been seen by some as a strategic alignment with Elon Musk—given the firm’s long-standing ties to Musk’s ventures including SpaceX, The Boring Company, Neuralink, and even its early stake in X.com (which became PayPal)—the move into Anthropic signals a broader, more aggressive approach to AI investing. This shift is even more notable given Sequoia’s past commitment to avoiding conflicts. In 2020, the firm made history by walking away from its investment in Finix, a payments startup, after determining it competed with Stripe. Sequoia forfeited its $21 million stake, surrendering shares, board rights, and information access—its first known instance of cutting ties with a funded company over competitive concerns. The investment comes amid major leadership changes at Sequoia, following the surprise ousting of longtime partner Roelof Botha just days after a meeting with this editor at TechCrunch Disrupt. Alfred Lin and Pat Grady, who led the Finix deal, have since taken on expanded roles. Anthropic is reportedly preparing for an IPO that could happen as soon as this year. Sequoia has not yet commented on the report.