Insight Partners Diversifies AI Strategy Amid Frontier Lab Concentration

Insight Partners is eschewing the industry trend of concentrating capital into a few frontier AI labs, opting instead for a diversified portfolio strategy, as TechCrunch first reported. In an interview with the outlet, co-leader Devin Parekh noted that while many venture capitalists are "betting the farm" on companies like OpenAI and Anthropic, Insight is prioritizing smaller, earlier-stage bets to mitigate risk.

Parekh observed that current AI valuations are rising at a pace reminiscent of 2021, a period he noted "didn't end well." He argued that because current funding rounds are moving so quickly, investors are paying higher prices without the benefit of incremental data to reduce risk. Consequently, Insight is shifting toward writing smaller checks—typically in the $20 million to $25 million range—allowing the firm to double down on winners without risking significant fund capital on any single deal.

While Insight maintains stakes in both OpenAI and Anthropic, Parekh described these as later-stage investments where the firm is "buying a great stock" rather than driving governance. He viewed OpenAI as the primary play for consumers and Anthropic as the company with a distinct strategy for the enterprise.

Beyond frontier labs, Parekh highlighted the potential of vertical AI, noting that talent density varies by sector. For example, he cited Ramp as a New York-concentrated financial services play. Parekh also noted that the firm remains cautious regarding physical AI and robotics, which he characterized as "science projects" with uncertain adoption timelines.

Regarding other activities, Parekh stated that Insight has not completed a major buyout since 2024 due to high interest rates and unreceptive debt markets. He also disclosed that the firm lost a bid for the AI legal-tech company Legora to General Catalyst.