Investor loyalty fades as VCs back both OpenAI and Anthropic

The traditional venture capital model is shifting as firms increasingly back competing artificial intelligence labs. At least a dozen direct investors in OpenAI also backed Anthropic’s recent funding round. This trend comes as OpenAI is on the verge of finalizing a new $100 billion funding round, while Anthropic recently closed its own $30 billion funding raise. These dual investments challenge the traditional expectations of exclusive backing among competing AI labs. The concept of investor loyalty is almost dead as venture capital (VC) firms increasingly back competing AI companies, despite the scale of capital involved in these separate raises.

While dual investments are expected from asset managers or hedge funds, the trend has reached venture capital firms that traditionally market themselves as “founder friendly”—a VC marketing term implying support for startup founders. Notable venture firms backing both competitors include Founders Fund, Iconiq, Insight Partners, and Sequoia Capital. The crossover also extends to asset management: affiliated funds of BlackRock joined Anthropic’s $30 billion raise, even though Adebayo Ogunlesi, a senior managing director at BlackRock, sits on OpenAI’s board of directors. This dual backing occurs despite the potential conflicts of interest that arise when investing in direct rivals.

Sam Altman, the CEO of OpenAI and former president of startup accelerator Y Combinator, has responded to these conflicts. In 2024, Altman reportedly provided investors with a list of rivals he did not want them to back. According to documents in the lawsuit between Elon Musk and OpenAI, Altman stated that investors who “made non-passive investments” would no longer receive OpenAI’s confidential business information. This restriction directly impacts the traditional access that direct investors have to private company data, which normally carries a fiduciary responsibility—the legal obligation of one party to act in the best interest of another.

This erosion of loyalty creates new risks for startups, as longstanding rules are tossed by some firms in the Valley. When venture capital firms back direct competitors, it raises significant questions about how confidential information is protected. Consequently, conflict-of-interest policies have become a critical topic for founders to address before signing any term sheet, which is a non-binding agreement setting out the basic terms and conditions of an investment.

Why it matters

The traditional venture capital norm of investor loyalty is being challenged as firms increasingly back competing AI labs. This shift raises significant questions about conflicts of interest and the protection of confidential information for startups.