Insight Partners Continues Diversification Strategy Against Rivals Focused on OpenAI and Anthropic

Summary

Deven Parekh, Insight Partners' Co-CIO, defends the firm's diverse, multi-stage strategy against the industry's near-total focus on OpenAI and Anthropic. He argues that long-term returns favor a broad portfolio over allocating 35-40% of a fund to a single frontier lab.

Why it matters

As reports indicate that OpenAI and Anthropic absorbed roughly half of all venture capital investments in the first half of 2026, Insight's distinct stance highlights a real tension. While short-term performance perceptions support concentration, the firm's 13-fund track record demonstrates that diversification has delivered superior compound returns over decades. Parekh's admission that a 25% allocation to Anthropic would have made current returns look brighter, yet his rejection of that option, offers LPs a rare glimpse into how a top-tier fund weighs risk.

Highlights

• Insight holds stakes in OpenAI and Anthropic, describing them as 'great stocks' in later stages where exclusivity is no longer a factor.
• Parekh emphasizes that the current pace of rounds is forcing investors to pay 2021-era valuations with almost no additional data. This has led the firm to pivot toward earlier stages, writing checks of $20-25 million instead of $500 million.
• Physical AI/robotics is described as 'largely scientific projects.' This implies a double bet on whether adoption will occur and when. Consequently, Insight is currently monitoring the space but has not yet committed.

Critical take

While the diversification argument is theoretically sound, it conveniently ignores the reality that Insight's quiet, humble brand image is a luxury afforded by its $90 billion in assets under management and 26-year track record. With competitors dominating X and podcasts, a mid-sized fund that 'lets the portfolio speak' risks losing its entire workflow; the loss of the Legora deal to General Catalyst has already highlighted this risk. Furthermore, Parekh employs a heavy risk-aversion tactic; while praising AI's potential in healthcare, he dismisses AI risk concerns as 'hysteria.' This reads less like a balanced view and more like boardroom-level rhetoric designed to reassure LPs.