Andreessen Horowitz (a16z) has raised an additional $1.75 billion through its fifth growth fund, just days after closing its $1.1 billion AI hardware fund. The back-to-back fundraising rounds highlight the rapid flow of capital across the artificial intelligence industry.
The raises coincide with Goldman Sachs Research’s projection that global AI investment will reach $1 trillion in 2026, underscoring the scale of expected spending on AI software, infrastructure and hardware.
a16z raises $1.75 billion for growth-stage companies
A growth fund is a venture fund designed for later-stage startups that need capital to expand their products, teams, sales operations and geographic reach.
a16z’s growth fund originally launched in January with $6.75 billion. According to TechCrunch, the latest $1.75 billion is an extension of that fund rather than the creation of a new investment vehicle.
David George, head of a16z Growth, said in the company announcement that the team has supported more than 100 companies during their growth-stage journeys over the past seven-plus years. The portfolio includes Databricks and SpaceX.
The growth strategy focuses on enterprise and consumer AI, defense and industrial technology, robotics, healthcare and infrastructure.
a16z expands its AI hardware investment
The $1.1 billion Machine Age Fund gives a16z greater exposure to the physical infrastructure powering artificial intelligence. The fund targets the physical AI stack, including semiconductors, memory, networking, storage, data centers and robotics.
a16z says AI is driving major changes in hardware requirements. From the first H100 systems to Rubin, compute density in each rack has increased 28-fold. Rack power consumption has risen from 5–10 kilowatts to 100–250 kilowatts and is expected to reach 1 megawatt within three years, while hardware supply has traditionally grown by about 20% to 30% annually.
Both funds are part of a broader expansion by a16z. The firm announced more than $15 billion in new funds in January, and TechCrunch reported that it manages approximately $90 billion.
AI infrastructure attracts record investment
Independent investment data points in the same direction. The OECD found that AI infrastructure and hosting companies attracted $109.3 billion in venture capital in 2025, up from $47.4 billion in 2024. The sector accounted for more than 42% of all AI venture capital investment that year.
Goldman Sachs Research estimates that worldwide AI-related investment will total approximately $1 trillion in 2026, including $581 billion in the United States. Cumulative global AI investment since 2022 is expected to reach roughly $1.8 trillion by the end of 2026.
Gartner forecasts semiconductor revenue of approximately $1.6 trillion this year, a 92% increase, with memory revenue alone reaching about $837 billion. The research firm expects AI data centers’ share of chip revenue to rise from 36.5% in 2026 to more than 53% by 2030.
Stanford’s 2026 AI Index reported that global private AI investment reached $344.7 billion in 2025, up 127.5%. US private AI investment reached $285.9 billion, more than 23 times China’s $12.4 billion.
The OECD uses a narrower venture-capital measure. It found that AI companies attracted $258.7 billion, or 61% of the $427.1 billion invested across the global venture-capital market in 2025. That share rose from 30% in 2022, showing how sharply venture funding has shifted toward AI.
Large AI deals accelerate private valuations
The OECD also found that deals worth more than $100 million accounted for approximately 73% of AI venture-capital investment by value in 2025. Deals exceeding $1 billion represented almost half of the total.
This concentration helps explain why a relatively small group of AI companies is reaching extremely high private valuations so quickly. According to Forge Global, Anthropic, OpenAI and xAI reached $100 billion valuations in roughly five years, compared with an average of about 16 years for older companies such as SpaceX, Stripe and Waymo.
Investor demand is increasingly extending into AI hardware. British chip startup Fractile recently entered talks at a $6.5 billion pre-money valuation after reaching a preliminary agreement to supply approximately $250 million worth of chips to Anthropic, as reported by Cryptopolitan.
Fractile’s chips are not expected to arrive until 2027, making the proposed valuation an example of investors pricing in future demand for AI infrastructure well before the hardware reaches the market.
