Andreessen Horowitz has raised a $1.1 billion fund dedicated to artificial intelligence infrastructure startups, the venture capital firm announced today. The new vehicle, called the Machine Age Fund, will back companies building data center equipment including chips, memory, and networking gear.
There is also a focus on edge AI hardware providers, with smart home appliances and robots listed as target areas for investment.
The fund expands Andreessen Horowitz’s existing AI investment program.
Over the past two years, the firm has already invested in more than a half-dozen AI infrastructure startups across several market subsegments.
A portfolio built on power and chips
One notable bet from 2025 is Heron Power Inc., a company developing transformers for data centers. These devices lower the voltage of electricity coming from power plants to a level suitable for distribution within a facility.
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Standard transformers use a metal coil submerged in insulating liquid to make those adjustments.
The company’s systems instead use a solid-state design that replaces the coil with power management chips made from silicon carbide.
The transformers also include a battery that kicks in during power outages to prevent data center disruptions. According to the company, the battery and chips ship in a container-size chassis that’s smaller than conventional transformers.
Heron also promises higher cost-efficiency and faster lead times compared to traditional equipment.
Other portfolio companies in the fund’s AI infrastructure push include Volta Infrastructure Holdings Ltd., a data center builder, and several robotics startups. Chipmaker Unconventional Inc. is also part of that portfolio.
That mix of power equipment, computing hardware, and physical automation points to a broader thesis: AI’s growth won’t be limited to software and model training, but will require a massive rebuild of the physical systems that support it. The firm appears to be positioning itself across the entire stack, from the chip inside a transformer to the building that houses the servers.
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Scaling up to meet demand
The general partners wrote in a blog post that the hardware industry’s current growth trajectory is insufficient. “The hardware industry supply side is used to growing 20% to 30% per year at most; not the triple-digit growth that’s needed to catch up with demand,” they wrote. “This will change, quickly.”
Several of the people leading this effort have deep roots in the infrastructure market. General partners Martin Casado and Raghu Raghuram previously held senior roles at VMware, a major provider of data center management software. Partner Guido Appenzeller is the former chief technology officer of Intel Corp.’s data center business.
The fundraise comes as other venture firms also pour money into AI. In March, Kleiner Perkins raised $3.5 billion across two new funds, with one vehicle focused on early-stage AI startups. A month earlier, Thrive Capital, a backer of OpenAI Group PBC, raised $10 billion.
Andreessen Horowitz’s new fund is specifically aimed at the hardware layer, not the application layer. That distinction matters because AI infrastructure demands are straining existing supply chains. The focus on edge AI hardware, including robots, suggests the firm sees computing moving beyond the data center and into physical environments where decisions need to happen closer to the source of data.
The Machine Age Fund will invest from a position of experience, given the firm’s prior deals in this space. Whether the rapid growth the partners anticipate will materialize remains to be seen, but the fund gives them the capital to back companies attempting to make it happen.