a16z expands growth fund to $8.5B days after $1.1B chip fund

Andreessen Horowitz has expanded its fifth growth fund to $8.5 billion, adding another $1.75 billion since the fund launched in January with $6.75 billion. The announcement comes just days after a16z said it had raised a fresh $1.1 billion for a new, separate fund it’s calling the “Machine Age Fund,” whose steampunk-inspired name reflects its focus on AI hardware startups building chips, memory, networking, and storage.

The growth fund is dedicated to backing growth-stage startups that are scaling products, expanding into new geographies, and growing in other ways. Over seven years, the fund has invested in more than 100 companies, general partner David George, who leads the growth investment team, wrote in the firm’s announcement blog. He noted that in the age of AI, companies are reaching the growth stage faster and raising more cash at higher valuations than ever.

With these billions, a16z is pursuing enterprise and consumer AI technology, defense tech, robotics, infrastructure hardware and software, and health tech — essentially the whole stack. In this election year, the firm is also spending heavily on politics and lobbying. The new funds follow the $15 billion in new funding a16z announced in January, when it had $90 billion in assets under management.

Why it matters

The back-to-back fund announcements show a16z racing to keep pace with AI startups that are reaching massive scale and valuations faster than ever, while also expanding its political spending in an election year.