The venture capital firm Andreessen Horowitz has launched its first dedicated hardware fund, committing 1.1 billion dollars to the physical infrastructure behind artificial intelligence. The move marks a notable shift for a firm long associated with software investing.
The fund, named “Machine Age,” targets processors, memory systems, networking equipment, robotics and the other physical building blocks that AI increasingly depends on. It reflects a growing view that the technology’s hardest constraints now sit below the application layer.
For much of the past two decades, venture capital has favoured software, drawn by its high margins and rapid scaling. Hardware, with its heavy capital needs and thin returns, was often seen as a poor fit for the model. This fund is a deliberate bet against that orthodoxy.
The logic is that AI’s bottlenecks have moved. Chip availability, power delivery, memory bandwidth and manufacturing capacity now shape what is possible as much as any algorithm, and companies solving those problems have struggled to attract the capital that flowed so freely to software.
By dedicating a large fund specifically to the sector, the firm is signalling that it expects the next wave of value in AI to come partly from the machines and materials that make it run, not only from the models and applications on top.
Whether the bet pays off will take years to judge, and hardware remains a harder, slower business than software. But the size of the commitment is itself a statement about where one of the industry’s most influential investors believes the constraints, and the opportunities, now lie.
