Key Takeaways
- • Andreessen Horowitz (a16z) established a $1.1 billion (approximately 1.5 trillion Korean won) "Machine Age" fund in August to invest in AI hardware, according to the primary source.
- • Co-head and managing partner Raghu Raghuram, former VMware CEO, visited South Korea less than two months after the fund's announcement to explore investment opportunities.
- • The fund will invest across the AI infrastructure stack, including chips, memory, networks, data centers, and robotics, with no predefined sector allocation ratios.
- • Raghuram said Samsung Electronics and SK Hynix are as globally significant as NVIDIA because memory has become critical to AI, and predicted South Korea is likely to lead in next-generation memory technologies.
- • The most critical investment criterion is the founder, who must have technical expertise, the ability to negotiate with global supply-chain conglomerates, and a concrete plan to secure initial customers.
Summary
U.S. venture capital firm Andreessen Horowitz (a16z) established a $1.1 billion "Machine Age (Era of Machines) Fund" in August to invest in artificial intelligence hardware, according to a report in Chosun Ilbo. Less than two months after the announcement, Raghu Raghuram, co-head of the fund and managing partner, visited South Korea to explore investment opportunities. Raghuram, former CEO of cloud software company VMware, told the newspaper that "people underestimate the speed of technological advancement and overestimate the speed of actual adoption."
Raghuram compared the impact of AI to that of electricity rather than the cloud. He said that when ChatGPT first emerged he viewed it as the next change after cloud computing, but now sees it as the next change after electricity. While the cloud transformed enterprise IT, he argued AI will drive change across nearly all industries that make up gross domestic product. He drew an analogy to electric motors, which were initially confined to industrial settings before being adopted in home appliances, and said most AI demand has yet to emerge because many people have not yet benefited from the technology.
The fund's name reflects the view that steam engines, semiconductors, and the internet reshaped civilization, and that AI will now transform how humans and machines work. Investment targets span AI infrastructure, including chips, memory, networks, and data centers, as well as robotics. No predefined ratios were set for specific sectors. Raghuram said bottlenecks shift as computing performance and data processing demands evolve, so the fund will invest across the entire AI infrastructure stack. He identified founder quality as the most important selection criterion for hardware companies.
During the visit, Raghuram highlighted South Korea's position in memory and manufacturing, saying Samsung Electronics and SK Hynix are as globally significant as NVIDIA. He attributed the country's sustained strength despite competition from China to large-scale production capacity, innovation, and ties to Western supply chains, and predicted South Korea is likely to lead in next-generation memory technologies. He met with four to five Korean companies the day before the interview and contacted startups through some firms' investment divisions.
Raghuram compared the impact of AI to that of electricity rather than the cloud. He said that when ChatGPT first emerged he viewed it as the next change after cloud computing, but now sees it as the next change after electricity. While the cloud transformed enterprise IT, he argued AI will drive change across nearly all industries that make up gross domestic product. He drew an analogy to electric motors, which were initially confined to industrial settings before being adopted in home appliances, and said most AI demand has yet to emerge because many people have not yet benefited from the technology.
The fund's name reflects the view that steam engines, semiconductors, and the internet reshaped civilization, and that AI will now transform how humans and machines work. Investment targets span AI infrastructure, including chips, memory, networks, and data centers, as well as robotics. No predefined ratios were set for specific sectors. Raghuram said bottlenecks shift as computing performance and data processing demands evolve, so the fund will invest across the entire AI infrastructure stack. He identified founder quality as the most important selection criterion for hardware companies.
During the visit, Raghuram highlighted South Korea's position in memory and manufacturing, saying Samsung Electronics and SK Hynix are as globally significant as NVIDIA. He attributed the country's sustained strength despite competition from China to large-scale production capacity, innovation, and ties to Western supply chains, and predicted South Korea is likely to lead in next-generation memory technologies. He met with four to five Korean companies the day before the interview and contacted startups through some firms' investment divisions.
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