Andreessen Horowitz is in the midst of a reshuffle to sharpen its focus on AI, sources say

• A16z is reshuffling parts of its investment team to sharpen its focus on AI, sources tld Insider.
• One group is investing in AI applications while another will concentrate on AI infrastructure.
• General partners Alex Rampell and Martin Casado will lead teams focused on AI.

According to people familiar with the situation, Andreessen Horowitz is reorganizing parts of its investment organization in order to sharpen its focus on artificial intelligence.

According to the sources, the changes will focus the venture capital firm on two main themes: AI applications and AI infrastructure. They requested anonymity when discussing private matters.

According to the sources, the AI applications group is led by general partner Alex Rampell. Rampell is also in charge of the firm’s fintech strategy.

According to the people, general partner Martin Casado, who focuses on enterprise deals, will oversee another group investing in AI infrastructure.

Margit Wennmachers, A16z’s marketing director, did not respond to requests for comment. Messages seeking comment from Rampell and Casado were not returned.

The changes, announced at A16z’s recent glitzy annual meeting, show how one of Silicon Valley’s largest venture firms is attempting to reorient itself in order to capitalize on the boom in generative AI and large language models.

“AI provides us with the opportunity to improve the lives of everyone in ways that few other technologies, if any, have ever done,” the firm wrote in a recent submission to the US Copyright Office.

New leadership

This also demonstrates the rise of new leadership at A16z. Jeff Jordan, a longtime consumer-focused partner who led the firm’s investments in Airbnb, Instacart, and Pinterest, stepped down earlier this year.

Before investing in companies, Rampell and Casado spent much of their careers building them. Rampell cofounded the fintech behemoth Affirm before joining the venture capital behemoth in 2012. Casado joined in 2016 after co-founding Nicira, a network virtualization company acquired by VMware in 2012 for $1.2 billion.

According to The Information, Rampell was named head of a new team that combined the finance and consumer investment teams and was encouraged to pursue AI deals in June.

The reshuffle implies that A16z does not want to miss out on this AI opportunity.

The firm has already been involved in some of the year’s most exciting AI transactions, including OpenAI’s $300 million raise in April and Databricks’ $500 million raise in September. ElevenLabs, a generative AI startup, is in talks to raise capital at a $1 billion valuation, and A16z is competing for the deal, Insider reported earlier this week.

Pretzels

What is unclear is how much the changes will impact A16z’s investment strategy. According to one person familiar with the strategy, the firm’s partners will continue to invest across industries, but they will need to find a compelling story about how AI enables a startup to close a deal. That shouldn’t be too difficult, as many startups twist themselves into pretzels to demonstrate their participation in the trend.

“It’s a big PR moment,” said a well-known venture capitalist at another firm. “But functionally, a lot of people will keep doing the same thing.”

There’s also the question of whether A16z is focusing on AI too late, when valuations are already skyrocketing. According to Insider, Vinod Khosla, who was one of the first investors in OpenAI, has recently reduced his VC investments in AI.

“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,” said Khosla. “Investing in momentum is a bad idea.”