In a venture capital landscape increasingly defined by all-in bets on a handful of AI giants, Insight Partners is charting a deliberately different course. Deven Parekh, a managing director at the $90 billion firm, recently shared why his team is comfortable holding stakes in multiple competing AI labs, even as other investors consolidate their positions around OpenAI and Anthropic. The strategy, he argues, is not a lack of conviction but a recognition that the AI market is still too young to crown winners.
The Legora Lesson: When Conviction Meets Competition
Parekh's perspective was shaped, in part, by a recent high-profile deal. Insight Partners had been deeply involved with Legora, a promising AI startup, only to see it ultimately land with General Catalyst. While losing a deal is never pleasant, Parekh frames it as a natural outcome of a healthy ecosystem. "We had a strong thesis and supported the company, but sometimes another firm's approach resonates more with a founding team," he explains. The experience reinforced a core principle: in AI, no single investor has a monopoly on identifying the future.
This is not a one-off story. Across the industry, top-tier firms are jockeying for position in a sector where valuations are soaring and technical differentiation remains fluid. What sets Insight apart is its willingness to spread capital across what might appear to be direct rivals.
Why Hold Stakes in Competing AI Labs?
The conventional wisdom in venture capital has long favored concentrated bets. If you believe a company will dominate, why dilute your returns by investing in its competitors? Parekh challenges that logic when it comes to AI. "The technology is moving so quickly that today's leader could struggle tomorrow," he notes. "We want exposure to multiple approaches, multiple teams, and multiple potential winning architectures."
Insight's portfolio reflects this philosophy. The firm has backed a range of AI companies, from foundation model developers to application-layer startups. While Parekh does not disclose specific positions, he emphasizes that the firm evaluates each opportunity on its own merits rather than through a lens of "picking one winner." This approach, he says, is especially prudent in a field where breakthroughs can come from unexpected directions.
The Risk of Over-Concentration
Parekh is careful not to criticize peers who have placed enormous bets on OpenAI or Anthropic. "Those are exceptional companies with exceptional teams," he acknowledges. But he also points to the risks of over-concentration. Regulatory shifts, talent migrations, or a sudden technical leap could recalibrate the competitive landscape overnight. By diversifying, Insight aims to be resilient across multiple scenarios.
This is not a passive strategy. Parekh and his team actively monitor technical developments, engage with founders across the ecosystem, and maintain relationships with researchers at leading institutions. The goal is to see around corners and avoid being caught flat-footed if the market shifts.
The Bigger Picture: AI's Uncertain Future
Underpinning Insight's approach is a deep humility about the trajectory of artificial intelligence. Parekh points to history: in the early days of the internet, few predicted that search engines, social networks, and cloud computing would each become multi-billion-dollar categories. Similarly, he believes AI will spawn a diverse array of valuable companies, not just one or two dominant players.
"We are still in the first innings," he says. "The applications of this technology will touch every industry, and the winners may not even exist yet." That long-term view justifies a portfolio that includes both established leaders and emerging challengers.
It also explains why Insight is not exclusively focused on foundation models. The firm is actively investing in AI infrastructure, enterprise software, robotics, and healthcare applications. Each of these areas could produce category-defining companies, and each carries its own risk-reward profile.
What This Means for the Venture Ecosystem
Insight's stance has implications beyond its own returns. By signaling that it is comfortable backing multiple competing labs, the firm may encourage other investors to take a more nuanced view of the AI sector. That could, in turn, foster a more diverse and resilient innovation ecosystem, rather than a winner-take-all dynamic.
Parekh is quick to note that diversification is not the same as indecision. "We have strong opinions about specific technologies and teams," he says. "But we also recognize that the market will decide the ultimate winners. Our job is to be there when it does."
This balanced approach may be easier for a firm of Insight's size. With $90 billion in assets under management, it has the capacity to write multiple large checks without overexposing itself to any single company. Smaller firms may not have that luxury, but the underlying principle, staying open to multiple possibilities, is universally applicable.
Looking Ahead: The Next Wave of AI Investment
As the AI hype cycle matures, Parekh expects a shift from general-purpose models to specialized applications. "The real value will be created when AI solves specific, high-stakes problems in industries like finance, healthcare, and manufacturing," he predicts. Insight is positioning itself to capitalize on that shift by deepening its expertise in those verticals and building relationships with domain experts.
He also sees opportunity in the "picks and shovels" layer: the infrastructure that makes AI possible, from data management to model deployment. These companies may not grab headlines, but they can generate durable revenue and become critical components of the AI stack.
Ultimately, Parekh's message is one of patient conviction. The AI revolution is real, but its contours are still being drawn. By staying diversified, Insight aims to capture value wherever it emerges, without betting the farm on a single outcome.
Frequently Asked Questions
Why is Insight Partners diversifying its AI investments instead of focusing on OpenAI or Anthropic?
Insight Partners believes the AI market is still too early to identify definitive winners. By diversifying across multiple labs and approaches, the firm reduces risk and increases its chances of backing a future leader, even if that leader is not one of the current frontrunners.
What did Deven Parekh learn from losing the Legora deal to General Catalyst?
Parekh learned that in a competitive market, no single investor has a monopoly on identifying the best opportunities. The experience reinforced the importance of maintaining a diversified portfolio and staying open to multiple potential winners in the AI space.
Is Insight Partners avoiding investments in OpenAI and Anthropic altogether?
No, Parekh has not ruled out investments in any specific company. The firm evaluates each opportunity on its own merits. While it may hold stakes in multiple competing labs, that does not preclude involvement with OpenAI or Anthropic if the terms and thesis align.
What areas of AI does Insight Partners find most promising?
Insight sees significant potential in AI infrastructure, enterprise software, robotics, and healthcare applications. Parekh also anticipates a shift toward specialized, industry-specific AI solutions that solve high-stakes problems, as well as the "picks and shovels" layer that supports AI deployment.
How does Insight Partners' size enable its diversification strategy?
With $90 billion in assets under management, Insight can write multiple large checks without overexposing itself to any single company. This financial capacity allows the firm to maintain a broad portfolio across the AI ecosystem, a strategy that may not be feasible for smaller venture capital firms.