a16z Raises $1.1B Machine Age Fund to Back AI Hardware Buildout

Quick Facts

• a16z closed a $1.1 billion Machine Age Fund on Aug. 28, its first dedicated hardware-infrastructure vehicle.
• The fund targets chips, memory, networking, storage, data centers, robotics, and AI edge devices at both early and growth stages.
• Hardware deals now account for more than 20% of a16z’s deal flow, up from a negligible share just two years ago.

Andreessen Horowitz raised $1.1 billion for a new fund focused on the physical infrastructure required to scale artificial intelligence. The firm announced the Machine Age Fund on Aug. 28, calling it a social and national imperative to accelerate the physical buildout of AI.

General partners Martin Casado and Raghu Raghuram will lead the fund. Partners from a16z’s Infrastructure, American Dynamism, and Growth funds will also invest from the vehicle.

Why Hardware, Why Now

The numbers behind the launch tell the story. Compute density per rack increased 28 times from an H100 rack to a Rubin rack. Rack power has climbed from roughly 5 to 10 kilowatts to between 100 and 250 kilowatts, and will reach 1 megawatt within three years. Data center scale is moving from tens to hundreds of megawatts, with some campuses approaching gigawatt scale.

A16z argues that traditional hardware supply chains, built around 20% to 30% annual growth, are mismatched with the triple-digit growth in AI compute demand. The firm sees that mismatch as an opening for startups.

“Every time we have one of these technical epochs, it puts pressure on the infrastructure, but none of us have ever seen it this dramatic,” Casado said.

Fund Scope and Leadership

The Machine Age Fund will back AI processors, memory chips, networking equipment, data storage, robotics, and data centers. Raghuram described the target as “things that are within the four walls of the data center,” while also extending to home AI appliances and edge systems that interact with the physical world.

The leadership team brings direct hardware experience. Guido Appenzeller was previously CTO of Intel’s Data Center Group. Raghuram and Casado each spent decades in the data center space. Shangda Xu and David George have led investments across silicon, networking, and large-scale compute platforms. David Ulevitch and Erin Price-Wright lead hardware and U.S. manufacturing investments through the firm’s American Dynamism practice.

Recent hardware-focused portfolio companies include Unconventional AI, Nexthop, Volta, Atoms, Heron Power, and Mind Robotics.

Market Context

The fund arrives as the AI infrastructure sector draws scrutiny over spending scale. Annual AI infrastructure investment is estimated at $400 billion or more, while AI revenue stands near $100 billion. Separately, venture capital into humanoid robotics startups alone has reached $8.7 billion year-to-date in 2026, already double 2025’s full-year record.

The Machine Age Fund brings a16z’s total assets under management above $100 billion. In January 2026, the firm closed $15 billion across six funds, including a $1.7 billion Infrastructure Fund 2 and a $6.75 billion growth fund. The new $1.1 billion vehicle represents roughly 1% of the firm’s total capital.

Nick Rescigno, a fund strategies analyst at PitchBook, noted the significance of scale. “Dedicated hardware and robotics funds have existed for years, but when one of the largest firms in venture stands up a fund specifically for that, you pay attention,” he said.

The Broader Thesis

A16z frames the current cycle as comparable to prior computing transitions, from mainframes to client-server, the internet, cloud, and mobile. The firm argues this buildout is not a single product cycle but a multi-decade industrial expansion, and that the variety and intensity of work AI performs is increasing by orders of magnitude as systems move from chat to reasoning to coding.

Fifteen years after Marc Andreessen declared software is eating the world, a16z is writing large checks into the hardware that runs it.

Read more: a16z creates a $1.1B ‘Machine Age’ fund to ‘accelerate the physical buildout of AI’