Insight Partners doubles down on diversified investing as AI boom tests venture discipline
At the StrictlyVC event in New York, Deven Parekh, managing director at Insight Partners, shared his views on how the firm navigates venture capital, handles $90 billion in assets, and approaches diversification as artificial intelligence disrupts the market. Parekh also spoke about tackling competition for deals, managing conflicts of interest, and the evolving landscape of AI investment.
Balancing diversification with intelligent risk-taking in AI
Parekh acknowledged that AI carries real, though manageable, dangers, but he focused on the substantial benefits of AI for sectors like healthcare. Drawing from his board experience at NYU Langone, Parekh pointed out that healthcare professionals are now able to use AI to sift through vast data sets to spot heart attack risks, something he considers a significant benefit for society. While admitting that open-source models could be misused by non-state actors, Parekh argued that advances like new treatments and early detection of diseases present even greater potential for good.
He highlighted Insight Partners’ cautious approach as startup valuations climb back toward 2021 figures. Their commitment to a diversified portfolio is intentional; according to Parekh, “This business has always rewarded diversification over a long horizon. We’re on fund 13, so we have to think in terms of ten funds, not one.” He cautioned that although the payoff may look higher for investors focused on a single company such as Anthropic, that kind of risk rarely proves wise over time, and most limited partners avoid such concentrated bets.
Shifting strategies globally as AI heats up competition
Insight Partners takes a flexible approach to investing in early-stage, growth, and buyout deals worldwide, without fixed allocations by region or type. Since 2024, high interest rates and a tough debt market have hampered buyout activity, Parekh noted. Meanwhile, the fast-paced nature of venture fundraising now means less time to gather data and de-risk investments, prompting Insight to write smaller initial checks—about $20–25 million instead of $500 million—and then commit more capital to the most promising businesses as evidence emerges.
While the Bay Area remains a center for AI infrastructure talent, Parekh insisted on the importance of global reach. For example, he described losing a deal for Legora, a Stockholm-based AI legal tech company, to General Catalyst. At the same time, financial services sectors in places like New York continue to draw in outstanding talent.
Navigating conflicts of interest with high-profile AI stakes
Insight Partners has put capital into both OpenAI and Anthropic, two AI leaders accounting for almost half of all venture investment during the first half of the year. Parekh clarified that these investments happened at late stages, where Insight is off the board and not participating in governance. By contrast, the firm imposes strict information-sharing limits at earlier stages to avoid conflicts when companies are direct competitors. Still, Parekh said some founders are uneasy about even slight overlaps in focus.
With sky-high capital needs—$30–100 billion—for firms like OpenAI and Anthropic, Parekh observed that late-stage dynamics make exclusivity unrealistic. “At the Series A/B stage, we do have restrictions, and we don’t invest in directly competing companies,” Parekh added, but noted that today’s fluid late-stage environment is redrawing old boundaries.
Liquidity, secondaries, and the coming wave of AI IPOs
On the secondary market, Parekh pointed out that many funds launched in 2021–2023 are still sitting on large pools of capital and have not yet provided much liquidity for their backers. He underlined the fact that limited partners are seeking DPI (Distributions to Paid-In Capital) and actual liquidity events, rather than just increases in paper value. Over the past two years, Insight Partners has returned $20 billion to its LPs through both private sales and IPOs, and expects more returns ahead.
Parekh mentioned that the firm regularly counsels founders about when to capitalize on market highs, referencing Elad Gill’s suggestion that such “peaks” last only six to twelve months. “You don’t have to sell everything; de-risk 10 or 20%,” Parekh advised.
With Anthropic poised for an IPO soon and OpenAI potentially following, Parekh suggested these debuts could reset industry expectations. He warned, though, that the extraordinary growth that AI firms have enjoyed so far could be difficult to maintain once they are exposed to the scrutiny of public markets.
Vigilant portfolio review: Scaling winners and knowing when to exit
Among the firm’s 300 portfolio companies, Insight Partners keeps a close eye on each investment, frequently assessing which startups deserve increased support and which should be scaled back or exited. Parekh recalled the story of Armis, a security company: although Sequoia won the first round, Insight later acquired the full cap table within 18 months and eventually sold Armis to ServiceNow in 2026 for $7 billion. This, according to Parekh, exemplifies the need for both patience and readiness to act in the venture capital world.
As the venture capital ecosystem endures dramatic market cycles and technological disruption, Parekh emphasized Insight Partners’ commitment to a deliberate and diversified investment strategy, remaining steady while AI reshapes the playing field.