a16z seeks $10B for AI and defense while sidelining crypto

Andreessen Horowitz (a16z), a leading Silicon Valley venture capital firm, is reportedly seeking to raise approximately $10 billion for new investments focused on artificial intelligence and defense industries, notably excluding crypto from its fundraising plans despite recent bullish statements about the sector. This marks a significant strategic shift for one of the crypto industry’s most influential backers, which has invested heavily in digital assets and actively lobbied for favorable U.S. crypto regulation.

The big picture: The venture capital giant plans to allocate $6 billion for mature company investments, $1.5 billion each for AI applications and AI infrastructure funds, and over $1 billion for defense and manufacturing initiatives.

Why this matters: A16z has been instrumental in shaping the modern crypto ecosystem through its dedicated a16z Crypto arm, backing major players like Coinbase, Uniswap, Dapper Labs, and MakerDAO.
• The crypto exclusion is particularly surprising given the firm’s bullish “State of Crypto” report published Wednesday, which highlighted the sector’s global growth and mainstream adoption of stablecoins.
• The report emphasized that financial institutions have “embraced crypto,” making the fundraising omission even more notable.

Crypto isn’t completely abandoned: Despite the absence from the $10 billion raise, a16z continues making crypto investments through existing funds.
• The firm invested $50 million in Jito, a liquid staking protocol supporting the Solana network, earlier this month.
• In mid-April, a16z announced a $55 million investment in LayerZero, a Web3 company operating a crosschain messaging protocol.
• The company closed its UK offices in late January to focus more intensively on U.S. crypto efforts.

Industry tensions persist: Venture capital involvement in crypto remains controversial within the ecosystem.
• Ethereum co-founder Joseph Lubin recently acknowledged that VC firms aim to “suck as much value as possible from the Ethereum and broader ecosystem.”
• However, Lubin defended their role, saying their secondary goals include “progressing the systems toward rigorous decentralization” and claimed there was “no reason for concern.”
• Ethereum developer Federico Carrone warned that growing influence from firms like Paradigm could pose “tail risk” for the entire ecosystem, predicting this concern will become “increasingly clear to everyone in the months ahead.”