Benchmark partners say AI boom is eroding VC norms against backing rivals

Benchmark partners said at TechCrunch Disrupt that the AI boom is weakening a long-standing venture capital norm: avoiding investments in direct competitors. Eric Vishria said the current market has made conflicts harder to avoid because companies are changing direction so quickly. Chetan Puttagunta said AI is accelerating the issue, arguing that software building costs are approaching zero while founders are becoming far more ambitious, pushing companies into broader business areas and making competition inside a single portfolio more likely. Peter Fenton described the problem as the firm’s "kryptonite" and said transparent communication is critical. The remarks point to how AI is changing not only startup product cycles, but also investment boundaries that many venture firms have historically tried to maintain.