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a16z backs AI hardware
Andreessen Horowitz, also known as a16z, said it has raised $1.1B for its newest fund, the Machine Age Fund, and framed the move as accelerating the physical buildout of AI.
“We’ve raised $1.1B for a16z’s newest fund: the Machine Age Fund.”
The firm said the fund will invest in the “computer infrastructure on which AI runs,” including chips, memory, networking, and storage, and also full systems for running AI “from data centers to robotics to home AI appliances.”
a16z argued that today’s supply chain capability and the limits of physics and computer science are hitting the wall, and it described the moment as “a once-in-a-generation opportunity to rearchitect them as platforms.”
In its post, a16z said compute density per rack increased by 28X from an H100 rack to a Rubin rack, and it linked the shift to rack power moving from roughly 5-10 kW to 100-250 kW, with a path to 1MW over the next 3 years.
Infrastructure bottlenecks
a16z said networking within a rack has grown similarly, “hitting the limits of copper cabling,” and it argued that data center scale is moving from tens to hundreds of MW and, in some cases, GW-scale campuses.
The firm also said power is increasingly supplied not only from grid-only to grid plus behind-the-meter or captive sources, and it called for “faster and more efficient systems” and “cheaper and higher-bandwidth memory across the memory hierarchy.”
In a separate report, TechCrunch said the fund is designed to “accelerate the physical buildout of AI,” and it quoted the a16z post describing the need for “faster and more scalable interconnects between nodes and systems.”
TechCrunch also highlighted a16z’s emphasis on hardware, noting the fund will focus on investing in infrastructure that powers AI “from computer chips and memory to data centers and robots.”
Hardware bets and partners
a16z said hardware startups have grown from a small amount of deal flow to now over 20%, and it listed recent backings including Unconventional AI, Nexthop, Volta, Atoms, Heron Power and Mind Robotics.
“Hardware startups grow from a small amount of deal flow to now over 20%.”
The firm also pointed to its earlier hardware investments, saying in 2016 it led the series A in Skydio, it invested in SpaceX, it wrote its first check into Anduril in 2019, and it was among the first venture investors in Waymo’s 2020 raise.
In TechCrunch’s coverage of the broader AI-and-biotech conversation, Vijay Pande said, “We’re not doing 30 bets per year,” and he described his new approach as “probably five, not a lot of investments — very concentrated.”
TechCrunch reported that Pande’s new firm, VZVC, has no associates and relies heavily on AI for its day-to-day operations, while the Machine Age Fund announcement put senior attention behind a hardware-focused thesis for AI infrastructure.