a16z’s $1.1B Machine Age Fund Targets AI Hardware and Data Centers

Andreessen Horowitz announced on August 28, 2026 that it has raised $1.1 billion for a new investment vehicle, the Machine Age Fund, which will back companies building the physical infrastructure on which artificial intelligence runs.

The announcement, published on the firm’s website and authored by Ben Horowitz, Martin Casado, Raghu Raghuram, David Ulevitch, and David George, states: “We’ve raised $1.1B for a16z’s newest fund: the Machine Age Fund.”

According to the post, the fund will invest in all of the computer infrastructure on which AI runs, including chips, memory, networking, and storage. The mandate also covers full systems for running AI, spanning data centers, robotics, and home AI appliances. The authors wrote that each of these layers of the AI stack is hitting the wall of today’s supply chain capability and the limits of physics and computer science, and they described an urgent need for innovation and investment to rearchitect those layers as platforms, “all the way down to the electricity.”

The post states that the firm is seeing an upward inflection point in the utility and variety of work AI can do over just the past year. As AI evolves from chat to reasoning to coding and other forms of knowledge work, the authors wrote, both the demand for work and the token intensity of the work increase by orders of magnitude.

The authors compared the shift to reinventions that occurred at each prior epoch of compute, citing the move from mainframe to client server and then the Internet, cloud, and mobile eras. They wrote that what is different this time is the magnitude and breadth of change needed to keep up with demand, and the speed required to do so.

Technical Figures Cited in the Announcement

The announcement listed several figures to describe the infrastructure buildout it intends to fund:

• Compute density per rack increased 28X from an H100 rack to a Rubin rack.
• Networking within a rack has grown similarly, hitting the limits of copper cabling.
• Rack power moved from roughly 5 to 10 kW to 100 to 250 kW to support today’s systems and will increase to 1 MW over the next three years.
• Data center scale is moving from tens to hundreds of megawatts and, in some cases, to gigawatt-scale campuses.
• Power is increasingly supplied not only from the grid but from grid plus behind-the-meter or captive sources.

The post states that faster and more efficient systems are needed, along with cheaper and higher-bandwidth memory across the memory hierarchy, faster and more scalable interconnects between nodes and systems, and power-efficient edge devices for AI to explore and interact with the world. It also cites the need for cooling, materials, electrical, and real estate buildout to support those systems. According to the authors, the hardware industry’s supply side is used to growing 20% to 30% per year at most, rather than the triple-digit growth they state is needed to catch up with demand.

Hardware Deal Flow, Prior Investments, and Team

The firm said hardware startups have grown from a small amount of its deal flow over the last couple of years to now over 20%.

The announcement states that a16z has recently backed a number of hardware companies, naming Unconventional AI, Nexthop, Volta, Atoms, Heron Power, and Mind Robotics. It also lists earlier hardware investments: the firm led the Series A in Skydio in 2016, invested in SpaceX (SPCX ), wrote its first check into Anduril in 2019, and was among the first venture investors in Waymo’s 2020 raise.

On team, the post states that Guido Appenzeller was the CTO of Intel’s Data Center Group, and that Raghu Raghuram and Martin Casado spent multiple decades in the data center space working on system software, much of which required deep hardware partnership. Shangda Xu and David George have led investments across the AI infrastructure stack, from silicon and networking to large-scale systems and compute platforms, according to the announcement. David Ulevitch and Erin Price-Wright lead many of the firm’s hardware and U.S. manufacturing investments through its American Dynamism practice.

Contributor biographies published with the announcement state that Casado leads the firm’s infrastructure practice, that Raghuram is a managing partner and a general partner on the Growth and Infrastructure investing teams, that Ulevitch leads the American Dynamism practice, and that George leads the Growth investing team. Horowitz is a cofounder and general partner of the firm.

The firm said the go-to-market, talent, and marketing machine it has built is now ready to serve hardware founders, and the post states that the a16z network has exceptional access to customers, suppliers, and others relevant to what the authors describe as a new age of hardware reinvention. The announcement closes by inviting founders who are reinventing AI hardware to contact the firm.

A disclosure published with the post states that a16z Capital Management is an investment adviser registered with the Securities and Exchange Commission.