Sequoia Capital has long avoided simultaneously betting on direct competitors, previously focusing on supporting OpenAI and xAI while maintaining a cautious stance on Anthropic for years. After Alfred Lin and Pat Grady took over as co-leads at the end of 2025, they adjusted their strategy and participated in Anthropic's financing in January 2026, subsequently increasing their investment in higher valuation rounds.

In terms of capital strategy, Sequoia shifted resources from a single-winner approach to a multi-model parallel layout, motivated by the recognition that the AI foundational model market is large enough to support multiple giants simultaneously, and using later large checks to capture shares during the exponential growth phase. The investment strategy transitioned from early misses to late-stage re-investment, reflecting a repricing of the acceleration in computing and revenue curves.

This is similar to Sequoia's early missed investment in Facebook followed by later investments, or late-stage top-ups for exponential companies like Google; currently, we are in a capital-intensive period for AI, where the valuations and financing scales of leading model companies far exceed traditional software paradigms.

Essentially, this represents capital concentration. Exponential growth forces investment institutions to abandon linear priors, as the mechanism dictates that when the technology curve is steep, the cost of early underestimation is very high, necessitating larger amounts of capital later to compensate for cognitive lag, thereby further concentrating capital on a few validated exponential players.

ABAB News · Law of Cognition

Linear brains always underestimate exponential
Outdated priors must be updated immediately
If you miss early, make up with scale