Andreessen Horowitz is reshuffling parts of its investment organization to sharpen its focus on artificial intelligence, according to people with knowledge of the situation.
The changes will center the venture capital firm on two main themes: AI applications and AI infrastructure, the people said. They asked not to be identified discussing private matters.
The AI applications group is being headed by general partner Alex Rampell, according to the sources. Rampell also leads the firm’s fintech strategy.
General partner Martin Casado, who focuses on enterprise deals, will oversee another group investing in AI infrastructure, the people said.
Margit Wennmachers, the head of marketing at A16z, did not respond to requests for comment. Rampell and Casado did not respond to messages seeking comment.
The changes, announced at A16z’s recent glitzy annual meeting, reveal how one of the largest venture firms in Silicon Valley is trying to reorient itself to capitalize on the boom in generative AI and large language models.
“AI offers us the opportunity to improve the lives of everyone in a way that few other technologies — and maybe no other technologies — ever have,” the firm wrote in a recent submission to the US Copyright Office.
New leadership
This also shows the ascension of new leadership at A16z. Earlier this year, Jeff Jordan, a longtime consumer-focused partner who led the firm’s investments in Airbnb, Instacart, and Pinterest, stepped away.
Rampell and Casado spent much of their careers building companies before investing in them. Rampell was a cofounder of fintech giant Affirm before joining the venture-capital powerhouse in 2012. Casado joined in 2016 after founding Nicira, a network virtualization company that was acquired by VMware for $1.2 billion in 2012.
In June, The Information reported that Rampell was named head of a new team that combined the finance and consumer investment teams and was being encouraged to pursue AI deals.
The reshuffle suggests that A16z doesn’t want to miss out on this AI moment.
The firm has already been a part of some of the hottest AI deals of the year, including OpenAI’s $300 million raise in April and Databricks’ $500 million fundraise in September. Generative AI startup ElevenLabs is in talks to raise capital at a $1 billion valuation, and A16z is vying for that deal, Insider reported earlier this week.
Pretzels
What’s not clear is how much the changes will mean in terms of how A16z will actually invest. One person with knowledge of the strategy said the firm’s partners will still invest across different sectors, but they will have to find a compelling story about how a startup is enabled by AI to get a deal through. That shouldn’t be too hard as many startups twist themselves into pretzels to show they’re part of the trend.
“It’s a big PR moment,” said a well-known VC at another firm. “But functionally, a lot of people will keep doing the same thing.”
There is also the question of whether A16z is zeroing in on AI too late, when valuations are overheated. Vinod Khosla, who wrote one of the earliest checks into OpenAI, has pulled back on most VC investments in AI lately, as Insider reported.
“Most of these valuations in AI that are in the hundreds of millions or billions of dollars will correct themselves because there will be more of a winner take all phenomena than we realize,” Khosla said. “Investing in momentum is a bad idea.”
Do you have information about A16z or another venture firm? Please contact reporter Ben Bergman at [email protected].
To get in touch with Melia Russell: [email protected]
Read the full article here