The Infrastructure Behind the Machine Age

**Ben Horowitz** (0:00)
We have a whole new technology that's the most important technology ever, and you need a whole new infrastructure.

**Raghu Raghuram** (0:05)
Normally, when we talk about the infrastructure, we're talking about the servers, the storage, and the network. Here, it goes all the way down to the mines, copper mines. That's how widespread this thing is going to be.

**Martin Casado** (0:15)
It used to be when you built something, it was an engineering problem. And here, it feels like it really is a resource limitation. So whether it's tokens or not, we're pouring a ton of money into systems, and then those systems are producing a result. And right now, we're bottling the system's ability to actually match the resource for pouring into them.

**Raghu Raghuram** (0:32)
The leading memory realm said the demand they have today, it will take them three years of capacity to supply.

**Erik Torenberg** (0:38)
If this fund does what we think it will do, how do we see the world in five to 10 years?

**Ben Horowitz** (0:42)
America wins in the infrastructure game, and that would be awesome.

**Erik Torenberg** (0:47)
Today, a16z is announcing the Machine Age Fund, a new fund dedicated to the infrastructure powering the next era of AI. I'm joined by Ben Horowitz, Raghu Raghuram, and Martin Casado to explain why we're launching it now, and why we believe the next major bottle-mechanic AI isn't necessarily the model. It's everything underneath it. Chips, memory, networking, power, cooling and data centers are all being pushed beyond what they were originally designed to handle. At the same time, AI is changing an old rule of technology. Throwing money at an engineering problem didn't necessarily make it move faster. Increasingly, capital can be converted directly into compute, and compute into more capable intelligence.
We unpack what that shift means, where new infrastructure companies can break through, and why a new generation of founders is returning to some of the hardest problems in computing.
Ben, Martin, Raghu, welcome. Thank you.

**Ben Horowitz** (1:49)
All right. Thank you.

**Erik Torenberg** (1:50)
I want to start with a marked quote to introduce this new fund. This is the biggest technological revolution of my lifetime. This is clearly bigger than the internet.
The comps on this are the microprocessor, the steam engine and electricity, or maybe the wheel. Guys, the Machine Age Fund, please introduce it. Ben, start us off.

**Ben Horowitz** (2:08)
Well, basically what's happened is we have a whole new technology that's the most important technology ever. And what happens every time there's a dramatic new way of using all of the things that we love, infrastructure, you need a whole new infrastructure. And never has it been more high impact as it is on this one. So not only do we need new chips, new system software, we need new ways of doing power, we need to replace copper.
I mean, it's absolutely everything. So it's a very exciting time. So particularly for the hardware aspects of this new era, we needed a new approach.

**Raghu Raghuram** (2:54)
Yeah, I would agree. Normally when we, at least in the computing, when we talk about the infrastructure world, we're talking about the servers and the storage of the network. Here it goes all the way down to the mines, copper mines. That's how widespread this thing is going to be.
And that's number one. And number two, I think what we have seen over the last three years is a steady increase of the capabilities of the models, where the model is no longer the model. And in fact, using these models are getting better faster and faster and faster. Now the bottleneck is all what I call south of the model. And so that's when we need to work on that.

**Martin Casado** (3:32)
The only thing I'd add very quickly is we tend to follow founders.
And we've been watching over the last couple of years is the number of very strong teams going after complex hardware problems has increased. I don't know the actual numbers, but I was trying to estimate it over the weekend. So I think we'd get maybe 5% of the deals from top founders would come in would be hardware before. I would say north of 20% or 30% right now. So like the founder community, which tends to be much smarter than the BC community, has identified this as a very active area for innovation and they're responding.

**Ben Horowitz** (4:00)
I think 5% is probably generous.

**Martin Casado** (4:02)
Yeah, it's very low. It's very low.

**Ben Horowitz** (4:04)
Yeah, 3%.

**Martin Casado** (4:04)
Yeah.

**Erik Torenberg** (4:05)
And explain some of the macro conditions that have led to this change in terms of the surplus of founders pursuing these ideas. What are they seeing that's enabled?