Sequoia Capital is reportedly investing in Anthropic, the AI startup developing Claude. The Financial Times broke the news, citing sources familiar with the deal. This move defies Silicon Valley convention. Venture capital firms typically avoid funding direct competitors.

Sequoia already holds investments in OpenAI and Elon Musk's xAI. The funding round is reportedly led by Singapore's GIC and U.S. investment firm, I.

The investment raises questions about information access. OpenAI CEO Sam Altman testified last year about investor restrictions. He stated that investors with access to OpenAI's confidential data would lose that access if they invested in competitors. This policy aimed to prevent misuse of sensitive information.

Anthropic is developing Claude, a rival to OpenAI's ChatGPT. Both models are large language models (LLMs). LLMs are trained on massive datasets to generate human-like text. They power chatbots, content creation tools, and more.

The deal's implications are significant. It could signal a shift in VC strategy. It may also intensify competition in the rapidly evolving AI landscape. The investment could provide Anthropic with resources to accelerate development and deployment of Claude. The AI community will be watching closely to see how this unfolds.