Andreessen Horowitz launches $1.1B fund for AI infrastructure

Andreessen Horowitz has closed a $1.1 billion fund dedicated to artificial intelligence infrastructure investments, targeting companies that build the physical hardware powering the AI boom.

The Machine Age Fund will focus on data center components including chips, memory and networking equipment, according to an announcement from the venture capital firm. The fund also plans to invest in edge AI hardware providers, spanning smart home devices and robotics companies.

Expanding beyond software

The new fund represents a significant expansion of Andreessen Horowitz's AI investment strategy, which has already backed more than half a dozen infrastructure startups over the past two years. These investments span multiple hardware categories that traditional venture capital has historically avoided due to long development cycles and capital intensity.

One notable portfolio company, Heron Power Inc., develops solid-state transformers for data centers that replace traditional metal coil designs with silicon carbide chips. The company's systems include integrated batteries that activate during power outages and ship in container-size units smaller than conventional transformers. Andreessen Horowitz backed Heron in 2025.

Other investments include data center builder Volta Infrastructure Holdings Ltd., chipmaker Unconventional Inc., and several robotics startups, according to SiliconANGLE, which first reported the fund details.

Why it matters

The hardware supply chain has become a critical bottleneck for AI deployment. As Andreessen Horowitz general partners noted in a blog post, the hardware industry typically grows 20-30% annually but now faces demand requiring triple-digit growth rates. This mismatch creates opportunities for startups that can accelerate production or improve efficiency, but also represents a fundamental infrastructure challenge that could constrain AI adoption regardless of software advances.

Veteran infrastructure expertise

The fund benefits from deep infrastructure experience among Andreessen Horowitz's partnership. Martin Casado and Raghu Raghuram, two of the general partners leading the initiative, previously held senior positions at VMware. Partner Guido Appenzeller served as chief technology officer of Intel's data center business.

This hardware-focused fund arrives amid a broader surge in AI-specific venture capital. Kleiner Perkins raised $3.5 billion across two funds in March, with one vehicle dedicated to early-stage AI companies. Thrive Capital, an OpenAI backer, secured $10 billion in February.

The concentration of capital flowing into AI infrastructure reflects investor conviction that the current supply constraints represent a multi-year investment opportunity rather than a temporary imbalance. Whether hardware production can scale fast enough to meet AI demand remains an open question that will shape the technology's trajectory through the rest of the decade.

Details of the fund were reported by SiliconANGLE.