Andreessen Horowitz Announces 'The Machine Age Fund'

A16Z has raised $1.1B for its newest fund: the Machine Age Fund, aimed at accelerating the physical buildout of AI. The fund reflects a broader push to bring AI into the physical world, positioning the technology as a powerful tool for solving real-world problems and expanding abundance.

AI’s capabilities are expanding rapidly, with systems moving from chat to reasoning, coding, and increasingly complex forms of knowledge work. As utility and demand grow, so does the computational intensity, pushing machine intelligence increasingly vertical.

The fund will invest across the physical infrastructure powering AI, including chips, memory, networking, and storage, as well as complete systems such as data centers, robotics, and home AI appliances.

Across these layers, AI is running into the limits of existing supply chains, physics, and computer science. That creates an urgent need for new infrastructure and a generational opportunity to rearchitect the AI stack, all the way down to electricity.

Reinvention has accompanied every major computing shift, from mainframes to client-server, the Internet, cloud, and mobile. This time, however, the scale and speed of change are unprecedented. Every layer of the infrastructure stack needs an upgrade:

• Compute density: 28× higher per rack, from H100 to Rubin.

• Networking: Scaling at a similar pace, pushing copper cabling toward its limits.

• Rack power: Rising from roughly 5–10 kW to 100–250 kW, with 1 MW racks expected within three years.

• Data centers: Expanding from tens to hundreds of MW, with some campuses reaching GW scale.

• Power supply: Shifting from grid-only toward grid plus behind-the-meter and captive generation.

The AI infrastructure stack needs to scale faster and more efficiently. That means cheaper, higher-bandwidth memory; faster, more scalable interconnects; and power-efficient edge devices capable of interacting with the physical world.

Supporting infrastructure must scale too, from cooling, materials, and electrical systems to data-center real estate.

The challenge is speed. Hardware supply chains are accustomed to 20–30% annual growth, not the triple-digit expansion needed to keep pace with AI demand. That gap is set to drive a rapid transformation across the industry.

Founders are already responding to the opportunity. Hardware startups have grown from a small share of a16z’s deal flow to more than 20% in recent years.

Although a16z is best known for software, hardware has long been part of its investment strategy. Recent bets include Unconventional AI, Nexthop, Volta, Atoms, Heron Power, and Mind Robotics, alongside earlier investments in Skydio, SpaceX, Anduril, and Waymo.

The firm also has deep hardware expertise across its team, spanning data centers, silicon, networking, large-scale systems, robotics, and U.S. manufacturing.

The Machine Age Fund formalizes hardware as a core investment strategy at a16z, bringing its GTM, talent, marketing, and industry networks to hardware founders building the next generation of AI infrastructure and physical systems.

Ambitious founders who are reinventing AI hardware and founding the machine age should reach out.

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