Silicon Valley-based venture capital firm Andreessen Horowitz is now reportedly gearing up to raise what would be the largest fund in its history — a $20Bn vehicle dedicated primarily to AI companies. According to media reports, which state sources familiar with the matter, the firm is seeking to capitalize on increasing global demand to invest in US-based tech firms, particularly those involved in the rapidly expanding AI sector. The firm has communicated to its limited partners (LPs) that the fund will primarily target growth-stage AI startups.
To achieve this fundraising target, the VC firm has been actively promoting the fund to international investors. Many foreign LPs view the fund as a streamlined opportunity to access the U.S. AI landscape, especially at a time when there are increasing political and economic tensions (the tech sector is already reeling from US President Donald Trump’s latest tariffs, while Big Tech companies like Apple are making moves to mitigate the fallout from the same).
The new fund’s scope would exceed the firm’s previous fundraising efforts by a considerable margin. Andreessen Horowitz’s largest fund to date is a $5 billion growth-stage fund raised in early 2022. The firm secured $9 billion in total commitments that year across several sector-focused vehicles, and a subsequent fundraising round last year managed to secure $7.2 billion, including $3.75 billion specifically for growth-stage investments.
If successfully raised, the $20 billion fund would stand just behind the massive funds launched by SoftBank’s Vision Fund, which made a name for itself in the global venture capital landscape with its $100 billion initial fund launched in 2017, followed by a second fund managing approximately $56 billion. The current planned would also exceed the assets under management by other prominent Silicon Valley firms, including Sequoia Capital, whose evergreen fund reached $19.6 billion this year, according to regulatory filings.
The firm plans to allocate a substantial portion of the new fund toward follow-on investments in existing portfolio companies, particularly those engaged in AI development. These companies often require substantial financial resources to build and scale AI models, including large language models that depend on extensive computing power and access to vast datasets, and the funding could help them in further advancing the AI sector. The VC firm has already made several investments in AI startups so far – it has backed Databricks, Elon Musk’s xAI, Safe Superintelligence, and France-based Mistral. It has also participated in secondary transactions to acquire shares in OpenAI, as well as established support mechanisms for its portfolio companies, including the assembly of thousands of Nvidia GPUs. These high-performance computing units are critical for AI model training and have been made available for rent to startups backed by a16z.
