Andreessen Horowitz is doubling down on artificial intelligence—literally. The Silicon Valley powerhouse, co-founded by Marc Andreessen and Ben Horowitz, is in early talks to raise a massive $20 billion fund, making it the largest in the firm's history.
If successful, it would be one of the biggest AI-focused funds ever, second only to SoftBank's Vision Funds.
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A $20 Billion Play For AI Dominance
Reuters reported that the firm, commonly referred to as a16z, is pitching the fund to global investors who want access to U.S.-based AI startups.
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The fund will focus entirely on growth-stage companies, with a large chunk reserved for follow-on investments in existing portfolio startups such as Databricks, Elon Musk's xAI, and France-based Mistral.
Andreessen Horowitz is also expected to lead the funding round for Thinking Machines Lab, a new venture from former OpenAI Chief Technology Officer Mira Murati. Reuters reported Thinking Machines Lab is already courting a valuation of $10 billion—even though it has yet to release a product.
Fueling Startups With Hardware
In October, a16z launched a new initiative called Oxygen, which gives its portfolio companies access to over 20,000 GPUs from Nvidia. TechCrunch reported that this private GPU cluster can be rented by startups in exchange for equity, addressing one of the AI industry's biggest bottlenecks: compute power.
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With demand for Nvidia chips soaring, this move allows a16z-backed startups to move fast without waiting on cloud providers or competing for limited hardware. The firm's strategy not only supports innovation but also reinforces its position as a major player in the AI development pipeline.
Global Pitch, Political Ties
The $20 billion megafund comes at a time of political and economic crosswinds. In 2023, a16z founders publicly backed President Donald Trump, a shift from their earlier Democratic leanings.
Later, Horowitz and his wife, Felicia, announced a personal donation to groups supporting the Harris-Walz campaign, citing a long-standing friendship with then Vice President Kamala Harris. He emphasized that the firm's political stance remained aligned solely with its Little Tech Agenda.
Investors are also watching the impact of Trump's proposed tariffs, which could affect the cost structure of AI infrastructure. Still, the global appetite for American AI remains strong, and a16z appears poised to tap into it while political conditions remain favorable.
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A Seat At The Mega-Fund Table
While large by any standard, the $20 billion goal still falls short of SoftBank's original Vision Fund, which launched in 2017 with $100 billion. However, the follow-up Vision Fund 2 has faced headwinds—reporting a $2.4 billion loss.
Meanwhile, Sequoia Capital's evergreen fund reached $19.6 billion by February. A16z, with $45 billion in assets under management, now seeks to join that elite club of high-stakes, high-impact VC players.
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