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.
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.
Photo: Shutterstock
Login to comment