Why Insight Partners Is Betting on Diversity, Not Just OpenAI and Anthropic

Insight Partners' Diversified Approach in a Concentrated AI Market

As the artificial intelligence landscape continues to evolve, one firm stands apart from the crowd with its deliberate divergence from industry trends. Insight Partners, co-led by Devin Parekh, has maintained a diversified investment strategy despite the prevailing focus on OpenAI and Anthropic. In an exclusive interview at TechCrunch's StrictlyVC event, Parekh shared insights into why this approach remains central to their philosophy.

From Quiet Investment to Bold Strategy

Devin Parekh has co-run Insight Partners for 26 years, and unlike many venture capitalists who thrive on public visibility, his firm operates with a quiet confidence. This understated approach is not just a matter of style but reflects the core strategy of focusing on performance rather than noise.

"Our attitude has been: Let the portfolio do the talking. We're investing in founders and companies. We have to communicate enough that people know who we are, but our performance should speak for itself — and that's driven by the portfolio, not by us being loud."

This stance is particularly striking given Insight Partners' significant presence in AI, including stakes in both OpenAI and Anthropic. But Parekh's emphasis on diversification underscores a belief in the long-term sustainability of a broad-based approach.

Lessons from Legora and the Value of Talent

One of the most telling moments in the interview was when Parekh discussed losing out on investing in Legora to General Catalyst. He reflected not only on the competition for top talent but also the importance of being where that talent is located.

"We competed for Legora — my partner Jeff Horing flew to [Stockholm] to pitch the company, because that's where the founder was. We lost that one to General Catalyst."

The case of Legora demonstrates how strategic geographic positioning and timing can be as critical as financial capability in venture capital. Parekh's candid admission highlights the reality that even with massive resources, not every deal can be won — and sometimes, it's simply about being in the right place at the right time.

AI Risk vs. Opportunity

Parekh addressed concerns about AI risks head-on, offering a measured perspective that reflects both caution and optimism:

"Sure, there's a risk some non-state actor gets access to an open-source model and creates a biological weapon. But there's an even higher probability we get a massive decrease in the time it takes to develop new drugs and cure diseases. I'll take that bet."

This balanced approach is evident in his view of AI's impact on healthcare:

"I'm on the board of NYU Langone — what AI is already doing with patient data is amazing. We can look at 50 million patient records and tell someone walking in for something unrelated that they have a 25% chance of a heart attack. Net-net, I think this is highly positive."

Parekh's perspective illustrates how AI's potential for good far outweighs the risks when used responsibly. This outlook positions Insight Partners not as a risk-averse firm but one that understands the value proposition of technology in real-world applications.

Investment Strategy: A Multi-Faceted Approach

Insight Partners invests across multiple stages and geographies, reflecting an approach that's more nuanced than the industry norm. Parekh noted that valuations are rising at a pace reminiscent of 2021 — a time when venture capital investments often led to market corrections.

"Right now, rounds move so fast there's almost no incremental data, so you're paying more without reducing risk. The logical response is to go earlier. With a scale fund, you can make smaller bets — write a $20–25 million check instead of $500 million — and double down on the winners."

This strategy has proven effective. Parekh cited Wiz as an example where early-stage investments allowed for substantial returns while minimizing risk exposure.

Why Diversification Still Matters

With OpenAI and Anthropic capturing much of the attention and capital, many firms are concentrating their bets on these two AI giants. Insight Partners' approach is a reminder that diversification isn't just about avoiding concentration risk — it's also about maximizing opportunities across a spectrum of innovation.

"We're not overly concentrated, so it's not an issue for us. But I'm an LP in other funds, and I know two funds right now — raising their entire fund in a month — whose pitch is literally '35–40% of this fund is going into one of those two companies.' I'm not saying OpenAI and Anthropic won't do well. But this business has always rewarded diversification over a long horizon."

This emphasis on long-term thinking aligns with Insight Partners' 13th fund approach, where strategic patience and diversified investment decisions have consistently paid off.

Secondaries: A Liquidity Mechanism

The firm's approach to secondaries reflects a broader understanding of capital markets. As the venture ecosystem grapples with liquidity challenges — particularly those stemming from the massive capital raised in 2021–2023 — Insight Partners is positioning itself to meet both investor and founder needs.

"We were guilty of this early on, too. As one of the biggest LPs in most of our own funds, we'd think, 'Why sell if it could double again?' But LPs don't get paid that way. Over the last two years we've returned more than $20 billion to LPs through strategic sales and IPOs, with a few billion more coming."

This strategic view of secondaries is particularly valuable for firms like Insight Partners, which must balance performance with liquidity — a key challenge in today's market.

AI Infrastructure vs. Physical Intelligence

While AI infrastructure remains the primary focus for Insight Partners, Parekh also discussed physical intelligence companies. Though he acknowledged they are still largely science projects, his firm is keeping an eye on potential opportunities.

"Physical intelligence companies are still largely science projects. It's not that they won't become real businesses, but you're making a bet on when robotics adoption happens, layered on top of a bet on whether it happens at all. We're watching, but we're not there yet."

This balanced approach to emerging technologies reflects Parekh's long-term vision — investing in innovation that has the potential to scale, while remaining pragmatic about the timelines involved.

Conclusion: Thinking Beyond the Hype

Devin Parekh's candid interview reveals a firm that operates with clarity and confidence. Insight Partners' decision to maintain a diversified approach, even as industry leaders focus on OpenAI and Anthropic, is rooted in a belief in long-term value creation. In an era of rapid innovation and intense competition, Parekh's strategy offers a compelling counterpoint — one that emphasizes careful planning, strategic patience, and the enduring power of diversification.

As we navigate the complexities of AI's future, Insight Partners stands as a reminder that in venture capital, success isn't just about following the crowd — it's about understanding when to lead.