Andreessen Horowitz raises a $1.1bn fund for AI hardware and infrastructure

Andreessen Horowitz (a16z) announced its first dedicated hardware fund, called the Machine Age Fund, with $1.1 billion in committed capital. The fund targets the physical layer of the AI stack — chips, memory, networking and storage — plus full systems including datacentres, robotics and home AI appliances, rather than the model and application layers the firm has more typically backed.

The firm argued the case in terms of physical limits rather than market opportunity: compute density had risen roughly 28-fold in recent years, it said, while power draw per server rack had climbed from 5–10kW to 100–250kW and was heading toward 1MW within three years. Because the hardware supply chain historically grows at 20–30% a year, a16z argued, meeting AI’s demand curve requires a different scale of investment than the industry’s normal capital cycle supplies.

The fund marks a return to hardware investing for a firm best known for software and, more recently, foundation-model bets, and it said hardware startups already accounted for more than a fifth of its deal flow, up from a marginal share historically. It is one of several signs through 2026 of AI capital shifting from model training itself toward the compute, power and physical infrastructure that training and inference depend on — a shift also visible in the same week’s separate announcements from Alibaba and HUMAIN about funding and building physical AI infrastructure directly.