Menlo Ventures is raising $3 billion for a new set of funds focused on artificial intelligence startups, a major expansion that reflects the firm’s growing confidence in the sector after an early bet on Anthropic paid off handsomely.

The fundraising, which the venture capital firm plans to announce on Tuesday, is the largest in its history. It also signals a shift in strategy. Menlo, which has traditionally concentrated on younger startups, now plans to pursue more late-stage investments, including deals on the scale of its backing of Anthropic.

The move comes after Menlo’s decision in 2024 to raise $500 million to invest in Anthropic, which at the time was still seen by many as an underdog in the generative AI race. Anthropic had not yet built the broad consumer recognition or revenue momentum of OpenAI and ChatGPT, making the investment a significant risk for the firm.

That risk has since turned into one of Menlo’s biggest wins. According to people familiar with the matter, Menlo’s Anthropic stake, including an additional $500 million invested across several rounds, is now worth nearly $14 billion. The valuation of Anthropic itself has climbed to more than $900 billion, underscoring how quickly investor enthusiasm for leading AI companies has escalated.

Managing partner Shawn Carolan has described the Anthropic investment as a defining moment for the firm, according to the source material. The deal helped elevate Menlo’s standing in the AI market and appears to be shaping how the firm wants to deploy capital going forward.

Menlo’s new fundraise arrives at a time when venture investors are competing aggressively to secure exposure to the biggest AI names and the next wave of startups built around the technology. The size of the new pool suggests Menlo wants flexibility to back both emerging companies and later-stage businesses that already have momentum.

The firm’s success with Anthropic also illustrates how concentrated the returns in AI investing can be. A handful of companies have attracted enormous valuations and investor attention, while firms that identified those winners early have seen their positions appreciate dramatically. For Menlo, the Anthropic stake has not only delivered financial upside, but also strengthened its ability to raise larger funds from limited partners looking for access to the AI boom.

Menlo has long been known for backing startups early in their life cycle. Its latest fundraise suggests the firm believes the opportunity in AI is broad enough to justify a wider investing mandate. By preparing to make larger, later-stage bets, Menlo is positioning itself to compete for assets at a point in the market where valuations are already high, but where the potential for scale remains substantial.

The announcement is likely to be watched closely by other venture firms and AI investors as fundraising conditions remain highly sensitive to the performance of top-tier startups. Menlo’s result shows that standout returns in artificial intelligence can still translate into very large new funds, especially when backed by a marquee win such as Anthropic.