Andreessen Horowitz Launches $1.1 Billion Machine Age Fund for AI Infrastructure Hardware

a16z creates a $1.1B 'Machine Age' fund to 'accelerate the physical buildout of AI'

Andreessen Horowitz has launched a new "Machine Age" fund with $1.1 billion raised. The firm's aim with the new fund is to "open the throttle and accelerate the physical buildout of AI." The fund will focus on hardware, bucking the firm's typical focus on the scaling power of software. In a post on the venture capital firm's website, a16z says the fund will focus on investing in the infrastructure that powers AI -- a swath that includes everything from computer chips and memory to data centers and robots. "We need faster, more efficient systems. We need cheaper and higher-bandwidth memory across the memory hierarchy. We need faster and more scalable interconnects between nodes and systems. We need power efficient edge devices for AI to explore and interact with the world. And of course we need all the cooling, materials, electrical, and real estate build out to support them," the post reads. AI is the "strongest tool ever developed for solving problems and bestowing abundance," the firm writes, calling its advancement a "social and national imperative."

a16z has raised $1.1bn to invest in the physical layer of AI

Chips, memory, networking, cooling, data centres and home appliances. The Machine Age Fund is a bet that software is no longer the constraint. Andreessen Horowitz has closed a $1.1bn fund that will invest exclusively in hardware. The Machine Age Fund, announced on Friday, covers the physical layer artificial intelligence runs on, from chips to the buildings that house them. The mandate takes in chips, memory, networking and storage, and then keeps going. Complete systems qualify too, defined broadly enough to stretch from data centres to robotics to AI appliances for the home. Five partners put their names to the launch: Ben Horowitz, Martin Casado, Raghu Raghuram, David Ulevitch and David George. That is a lot of senior attention for a single vehicle, and a fair indication of how central the firm considers the thesis. The case for it rests on physics rather than market sizing. Compute density has risen 28-fold between Nvidia's H100 generation and its Rubin racks, and a rack that once drew 5 to 10 kilowatts now draws between 100 and 250. Within three years, that is expected to reach a megawatt per rack. Individual data centres are already moving from tens of megawatts to hundreds, with some campuses approaching gigawatt scale, the trend now sending builders to their banks for financing on a different order. Every layer of that stack is running into the limits of what the supply chain can produce, and in places into the limits of physics and computer science. The bottleneck, on this reading, has moved out of the models and into the world. a16z's own deal flow has shifted with it. Hardware went from a marginal share of the deals the firm sees to more than 20% of them. Hardware has been the harder sell in venture for two decades, on the grounds that it takes longer, costs more, and scales worse than software. A fifth of a firm's pipeline is the point at which that objection stops being decisive. The portfolio the fund builds on spans a good deal more than semiconductors. Unconventional AI, Nexthop, Volta, Atoms and Mind Robotics sit alongside Skydio, SpaceX, Anduril and Waymo. That list is what defines how broadly systems is being read here. Drones, launch vehicles, defence hardware and autonomous vehicles all qualify, which puts the fund some distance from a conventional deeptech mandate. On the demand side, the argument turns on token intensity. Both the volume of AI work and the compute each unit of it consumes are rising by orders of magnitude, against growth the firm puts in triple digits. The specific areas of interest are narrower and rather more revealing. Memory and interconnect improvements, power-efficient edge devices, and the cooling, materials, electrical, and real estate infrastructure that surrounds a modern facility. Memory and interconnect are where the constraint has quietly settled. A rack full of accelerators that cannot be fed data fast enough is an expensive way to generate heat, and the industry has spent two years discovering how often that is the actual limit. That last category is the one worth watching in Europe. Real estate, power distribution and cooling have not historically been venture categories, and siting is already the binding constraint here, with 63% of new capacity now going somewhere other than the five established hubs. The fund arrives on top of an already unusual year. a16z announced more than $15bn across new funds in January, among them a $1.7bn Infrastructure Fund 2 and a $1.18bn American Dynamism Fund 2. How the Machine Age Fund relates to those has not been made clear, and there is no word yet on limited partners, cheque sizes, or stage focus. Recent cheques point the same way regardless, among them a Series A into Netris, which automates the networking that slows down GPU clouds. The pitch, stripped of the language around it, is that the scarce thing has changed. For most of the past decade, it was talent and distribution, and a16z is now betting $1.1bn that it is transformers, substations, and thermal design.

The Machine Age Fund | Andreessen Horowitz

We've raised $1.1B for a16z's newest fund: the Machine Age Fund. It's time to open the throttle and accelerate the physical buildout of AI: the strongest tool ever developed for solving problems and bestowing abundance. It is our social and national imperative. For anyone paying attention, this shouldn't be a surprise. We're seeing an upward inflection point in utility and variety of work that AI can do, just over the past year. And as we evolve from chat to reasoning to coding and other forms of knowledge work, both the demand for work and the token intensity of the work increase by orders of magnitude. Machine intelligence is going vertical. This fund will invest into all of the computer infrastructure on which AI runs, including chips, memory, networking, and storage. It also includes full systems for running AI: from data centers to robotics to home AI appliances. The common thread among all of these layers of the AI stack is that they are all hitting the wall of today's supply chain capability, and the limits of physics and computer science. So there is an urgent need for innovation and investment, and a once-in-a-generation opportunity to rearchitect them as platforms, all the way down to the electricity. Reinventions like this happen at each epoch of compute, from the shift from mainframe to client server, to the Internet, cloud and mobile. However, what is different this time is the magnitude and breadth of change needed to keep up with demand, and the speed required to do so. Everything needs an upgrade, now: * Compute density per rack increased by 28X from an H100 rack to a Rubin rack. * Networking within a rack has grown similarly, hitting the limits of copper cabling * Rack power moved from roughly 5-10 kW to 100-250 kW to support today's systems and will increase to 1MW over the next 3 years. * Data center scale is moving from tens to hundreds of MW and, in some cases, GW-scale campuses. * Power is increasingly supplied not only from grid-only to grid plus behind-the-meter or captive sources. We need faster, more efficient systems. We need cheaper and higher-bandwidth memory across the memory hierarchy. We need faster and more scalable interconnects between nodes and systems. We need power efficient edge devices for AI to explore and interact with the world. And of course we need all the cooling, materials, electrical, and real estate build out to support them. The hardware industry supply side is used to growing 20% to 30% per year at most; not the triple-digit growth that's needed to catch up with demand. This will change, quickly. Founders understand the opportunity. Over the last couple of years we've seen hardware startups grow from a small amount of deal flow to now over 20%. While we at a16z are generally known as software investors, we have always paid attention to hardware. Recently we've backed a number of hardware companies including Unconventional AI, Nexthop, Volta, Atoms and Mind Robotics. And we have selectively invested in hardware companies since our earliest days. In 2016, we led the series A in Skydio; we invested in SpaceX; we wrote our first check into Anduril in 2019, and were among the first venture investors in Waymo's 2020 raise. Hardware is in our team DNA, and it's great to get back to our roots. Guido Appenzeller was the CTO for Intel's Data Center Group (DPG). Raghu Raghuram and Martin Casado spent multiple decades in the data center space with system software, much of which required deep hardware partnership. Shangda Xu and David George have led investments across the AI infrastructure stack, from silicon and networking to large-scale systems and compute platforms. David Ulevitch and Erin Price-Wright lead many of the firm's hardware and U.S. manufacturing investments through our American Dynamism practice. We're excited to make hardware an official motion for a16z and announce the Machine Age Fund to support it. Our GTM, talent, and marketing machine that we've built at a16z is now ready to serve hardware founders. And the a16z network has exceptional access to customers, suppliers, and everybody else that's relevant, for a new age of hardware reinvention. Ambitious founders who are reinventing AI hardware and founding the machine age, please reach out. We're ready for you.

Andreessen Horowitz raises $1.1B AI infrastructure fund

Andreessen Horowitz today announced that it has raised a $1.1 billion fund to back artificial intelligence infrastructure startups. The Machine Age Fund will invest in companies that make data center equipment such as chips, memory and networking gear. Andreessen Horowitz also plans to prioritize providers of edge AI hardware. The venture capital firm listed smart home appliances and robots among its focus areas. The Machine Age Fund will expand Andreessen Horowitz's existing AI investment program. Over the past two years, the firm has invested in more than a half-dozen AI infrastructure startups across a range of market subsegments. In 2025, Andreessen Horowitz backed a company called Heron Power Inc. that develops transformers for data centers. A transformer lowers the voltage of the electricity that comes out of power plants to a level suitable for distribution. Standard transformers use a metal coil submerged in an insulating liquid to perform voltage adjustments. Heron's systems, in contrast, are based on a solid-state design. That means they replace the metal coil with power management chips. The company makes its chips from silicon carbide, the second toughest material after diamond. Heron's transformers also serve other purposes beyond changing voltage levels. They include a battery that activates during power outages to prevent data center disruptions. According to Heron, its transformer's battery and chips ship in a container-size chassis that is smaller than standard transformers. The company also promises higher cost-efficiency and faster lead times. Andreessen Horowitz's other AI infrastructure bets include Volta Infrastructure Holdings Ltd., a data center builder, and multiple robotics startups. Chipmaker Unconventional Inc. is also a portfolio company. "The hardware industry supply side is used to growing 20% to 30% per year at most; not the triple-digit growth that's needed to catch up with demand," a group of Andreessen Horowitz general partners wrote in a blog post. "This will change, quickly." The venture capital firm's investors are no stranger to the infrastructure market. Martin Casado and Raghu Raghuram, two of the post's authors, previously held senior roles at VMware, a major provider of data center management software. Andreessen Horowitz partner Guido Appenzeller is the former Chief Technology Officer of Intel Corp.'s data center business. Andreessen Horowitz is not the only venture capital firm that has raised funding recently to ramp up its AI investments. In March, Kleiner Perkins raised $3.5 billion across two new funds. One of those investment vehicles will focus on early-stage AI startups. A month earlier, OpenAI Group PBC backer Thrive Capital reeled in $10 billion.

QUICKSPARK: a16z Bets $1.1 Billion on the Machines Behind the AI Revolution - NVIDIA (NASDAQ:NVDA)

Andreessen Horowitz, colloquially known as a16z, is putting $1.1 billion behind the physical infrastructure powering the next phase of the artificial intelligence boom through its new Machine Age Fund, which will invest across the AI hardware stack, including chips, memory, networking, storage, data centers and robotics. A16z's partners stated in a blog post that the rapid growth of AI is encountering limits within the existing supply chain, as increasingly powerful systems require significantly more computing capacity and electricity. "Everything needs an upgrade, now," the firm's partners stated, pointing to a sharp increase in AI infrastructure requirements. Compute density per rack has risen 28-fold from Nvidia's (NASDAQ:NVDA) H100 systems to its upcoming Rubin architecture, while rack power has climbed from roughly 5-10 kilowatts to as much as 250 kilowatts. a16z said power requirements could reach 1 megawatt per rack within three years. Data centers are also expanding from tens of megawatts to hundreds of megawatts and, in some cases, gigawatt-scale campuses. Trending The firm said hardware startups have grown from a small portion of its deal flow to more than 20% in recent years, prompting it to make hardware an official investment focus. Markets OpenAI Just Poached Top Meta Executive as India Pressure Mounts Meta Platforms Inc. is losing a top regional leader after Sandhya Devanathan decided to leave the company for OpenAI. 3 min read Read this article This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.

Andreessen Horowitz Targets AI Supply Crunch With New $1.1 Billion Hardware Fund | PYMNTS.com

The Machine Age Fund will invest in computer infrastructure on which AI runs, including chips, memory, networking and storage, as well as full systems for running AI, such as data centers, robotics and home AI appliances, according to the post. "The common thread among all of these layers of the AI stack is that they are all hitting the wall of today's supply chain capability, and the limits of physics and computer science," Andreessen Horowitz said in the post. "So there is an urgent need for innovation and investment, and a once-in-a-generation opportunity to rearchitect them as platforms, all the way down to the electricity." The AI industry needs faster, more efficient systems; cheaper and higher-bandwidth memory; faster and more scalable interconnects between nodes and systems; power-efficient edge devices; and cooling, materials, electrical and real estate buildout, according to the post. "The hardware industry supply side is used to growing 20% to 30% per year at most; not the triple-digit growth that's needed to catch up with demand," the company said. "This will change, quickly." It was reported in January that Andreessen Horowitz committed an additional $1.7 billion to a fund for AI infrastructure projects that it set up in 2024 with $1.25 billion. That fund focused on any AI software targeted toward technical buyers and not consumers, including foundational models, networking security and coding applications. Andreessen Horowitz Co-Founder Ben Horowitz said at the time that it was too soon to make any judgments about the fund's performance, which is usually judged in terms of decades, but that so far the fund was "one of the best funds, like, I've ever seen." Abu Dhabi-based technology investment firm MGX announced July 1 that it raised $49 million for its new MGXFund I to make investments across the AI technology stack. USD.AI said Friday that it secured a $100 million stablecoin-based debt facility from digital asset platform Bullish to power its GPU financing ecosystem.