Insight Partners' Devin Parekh: Why He's Betting on Diversification Instead of OpenAI

A Contrarian Investment Thesis

While the venture capital world races to pour money into OpenAI and Anthropic, Insight Partners — which manages roughly $90 billion in assets — has chosen a different path. Partner Devin Parekh recently went on record to explain the firm's deliberate strategy of staying diversified amid the AI wave, even as peers pile into the leading foundation model companies.

At a time when many firms are going all-in on top-tier model providers, Insight Partners has remained notably measured. Parekh acknowledged that this approach may mean missing out on certain high-profile deals in the short term — but from a long-term risk management perspective, he argued that a diversified allocation is the more prudent choice.

Owning the Loss: A Candid Take on Missing Legora

Rarely do investors speak openly about deals that got away. Parekh was candid about losing the Legora deal to rival General Catalyst. In today's fiercely competitive AI investment landscape, the most sought-after companies often attract multiple top-tier firms simultaneously — and winning a marquee deal depends not just on capital, but on speed of conviction and the strength of a firm's ecosystem.

On the loss, Parekh was refreshingly pragmatic: investing is a game of probabilities, and no firm wins every deal. That kind of candor is uncommon in a VC culture that typically leads with its wins.

Holding Stakes in Competing AI Labs — and Being Fine With It

Another noteworthy stance from Parekh: he has no problem holding equity in AI labs that directly compete with one another. Under traditional investment logic, backing rivals within the same portfolio is often seen as a conflict of interest to be avoided. But in the fast-moving AI space, this "both sides of the bet" approach reflects a hedge against the deep uncertainty of which technical path will ultimately prevail.

No one can predict with certainty which AI lab will come out on top. Rather than making a single concentrated call, Parekh prefers to back multiple credible players. The underlying thinking treats the foundation model layer as a long race with an unclear finish line — and spreading positions across competitors reduces the damage if any single bet goes wrong.

Discipline at $90 Billion Scale

As a firm managing $90 billion in assets, Insight Partners' every move carries market weight. That sheer scale creates a fundamentally different risk appetite compared to smaller funds that can afford to swing for the fences on a single concentrated bet.

For large funds, consistent returns and manageable risk exposure tend to matter more than chasing any one unicorn. Parekh's emphasis on diversification is, in many ways, simply the natural expression of responsible capital management at scale. When market sentiment is euphoric and valuations keep climbing, maintaining independent judgment and investment discipline becomes especially valuable.

What This Means for the Industry

Insight Partners' position offers a useful counterpoint to an AI investment market running hot. The leading foundation model companies undeniably command powerful technological moats and enormous market attention — but whether their valuations have already priced in future growth remains an open question.

Parekh's strategy is a reminder that value creation in AI isn't confined to the foundation model layer. The application layer, tooling layer, and vertical-specific markets all hold meaningful opportunity. In an environment where everyone is chasing the same handful of names, a differentiated allocation strategy may be exactly what it takes to navigate through a full market cycle. That calm, contrarian thinking is worth serious consideration for anyone investing in AI today.