AI is Redrawing VC Rules as Investors Hedge Bets Against Rival Startups
As AI reshapes markets, VC firms like Sequoia Capital are backing rival startups, raising fresh questions.
- Published on January 21, 2026
- In AI Features
AI is Redrawing VC Rules as Investors Hedge Bets Against Rival Startups
As AI reshapes markets, VC firms like Sequoia Capital are backing rival startups, raising fresh questions.
- By Pallavi Chakravorty
Sequoia Capital’s decision to invest in Anthropic marks a departure from the traditional venture capital rulebook and is being viewed as the death of the ‘one winner’ venture capital model. Historically, VCs have avoided backing rival companies in the same sector, preferring to bet on a single winner. Yet Sequoia—already an investor in OpenAI and Elon Musk’s xAI—has now added Anthropic to its portfolio.
It is not alone in breaking this long-standing taboo and hedging bets against its portfolio companies in the same sector. Andreessen Horowitz, which recently raised $15 billion to expand investments across infrastructure, healthcare and defence, has backed OpenAI, xAI, and OpenAI co-founder Ilya Sutskever’s Safe Superintelligence (SSI). Fidelity and Ark Invest have invested in both OpenAI and xAI, while Sound Ventures and Wisdom Ventures both hold stakes in OpenAI and Anthropic.
Sequoia itself invested in OpenAI in 2021 and later backed SSI in September 2024.
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Pallavi Chakravorty
Pallavi Chakravorty is a senior writer and editor who has shaped narratives at India’s top newsrooms, including ET, Mint, Outlook Business, and HT. She specialises in long-form journalism, branded content strategy, and high-impact storytelling across technology and startups.
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