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VC Loyalty Crumbles Amidst AI Investment Frenzy
24 Feb
Summary
- Multiple OpenAI investors also backed rival Anthropic's funding.
- BlackRock's dual investment raises conflict of interest questions.
- AI's massive funding needs are challenging traditional VC norms.
The landscape of venture capital loyalty is rapidly eroding as major investment firms engage in dual backing of competing AI giants. OpenAI, reportedly close to a $100 billion funding round, and Anthropic, which recently secured $30 billion, both count many of the same investors. Firms like Founders Fund, Iconiq, Insight Partners, and Sequoia Capital have notably invested in both companies.
This trend is particularly surprising in venture capital, where investors typically pledge support to help startups succeed against rivals. BlackRock's participation in Anthropic's funding, while its senior managing director sits on OpenAI's board, exemplifies this evolving dynamic. While institutional investors like hedge funds and asset managers have long invested across public market competitors, this behavior is a departure for traditional VC firms.
The immense capital requirements and high growth potential of leading AI labs are driving this shift. Investors are facing difficult choices, with Sam Altman previously attempting to dissuade investors from backing OpenAI's direct competitors. Despite these attempts, many firms are prioritizing the vast financial opportunities presented by the burgeoning AI industry over established norms of exclusivity.
