Insight Partners keeps diversified AI investment strategy
Insight Partners, the investment firm with $90 billion in assets under management, is retaining a diversified investment strategy while other venture firms concentrate large portions of their funds in OpenAI and Anthropic. Co-head Devin Parekh said the firm holds stakes in both frontier AI companies but does not view that exposure as a reason to abandon diversification across a long investment horizon.
Parekh told TechCrunch’s StrictlyVC event in New York that OpenAI and Anthropic raised roughly half of all venture capital dollars in the first half of the year. He said he knew of funds raising entire vehicles with pitches that 35% to 40% would go to one of the two companies.
Later-stage AI investments change the conflict calculus
Insight’s positions in OpenAI and Anthropic reflect the stage of the investments, Parekh said. A firm that had led an early Series A round could be unable to invest in a direct rival, but a later-stage investor that is off the board and not directing governance has a different role.
He described OpenAI as the dominant consumer play and Anthropic as having a clear enterprise strategy, while noting that those positions are shifting. As the companies sought financing rounds of $30 billion to $100 billion, Parekh said, they were no longer able to dictate investor exclusivity.
At the Series A and B stages, Insight still applies information-sharing restrictions and does not invest in directly competing companies. Some founders, he added, remain sensitive even to overlaps representing only 2% of revenue.
Smaller initial checks can preserve flexibility
Parekh said rapidly moving follow-on rounds resemble the 2021 market: investors may pay more even though little new information has emerged to reduce risk. Insight’s response is to invest earlier, make smaller initial commitments and increase exposure to companies that prove successful.
He cited Wiz, where Insight made a Series A investment and continued to invest, as an example of returns being driven by subsequent checks. The structure also limits the impact if an early investment fails, because a $20 million to $25 million initial check is small relative to a scale fund.
That approach differs from allocating a large share of a fund to one frontier AI company. Parekh said an oversized Anthropic position might improve a fund’s returns in the current moment, but he argued that long-term data does not support excessive concentration. The scale of Anthropic’s financing is illustrated by Anthropic’s financing ahead of a trillion-dollar IPO as the company approaches an IPO and a $1 trillion valuation.
Liquidity and valuation discipline remain central
Insight has returned more than $20 billion to limited partners over the past two years through strategic sales and IPOs, Parekh said, with several billion more expected. He stressed that distributing cash matters even when investors believe a holding can continue gaining value.
He also cautioned founders against assuming rapidly rising valuations will continue indefinitely. His practical implication for businesses and investors is to use staged commitments, review portfolio evidence regularly and retain enough flexibility to de-risk positions when liquidity opportunities appear.