Join The Information and NYSE on October 9 during San Francisco Tech Week for a cocktail reception and discussion with the New York Stock Exchange's head of market development, Erik Peña, Carta CFO Charly Kevers and The Information's Katie Roof. 

Andreessen Horowitz co-founder Ben Horowitz says only a small subset of AI companies, such as portfolio companies Safe Superintelligence Inc. and Thinking Machines Labs, need massive compute contracts. But many AI startups still need help getting access to bottlenecked resources, like chips to train their models.

The venture firm said Thursday it had hired Raghu Raghuram, former VMware CEO, to help address those computing challenges. Horowitz believes Raghuram is one of the few people in the world with the level of experience as both a chief executive and a technologist.

"You can really count them on one hand—it's like Raghu and Jensen [Huang, Nvidia CEO]," Horowitz said. "Because the entire computing industry is getting rebuilt, there just are a lot more opportunities right now than there have been in quite some time." 

At Andreessen Horowitz, Raghuram will serve as a managing partner, replacing former managing partner Scott Kupor, who joined the Trump administration. Raghuram will also serve as a general partner for its growth and infrastructure investments. 

His appointment is the latest sign that Andreessen Horowitz is prioritizing access to computing as it courts and supports startup founders. It has recently expanded the cluster of chips it rents to portfolio companies to multiple private clusters.

"We have very senior relationships with all the good chip manufacturers," as well as relationships with the governments of countries with big data center initiatives, Horowitz said. 

Raghuram, who once led VMware's landmark partnership with Nvidia, described his new focus as helping founders work on technical problems in AI infrastructure, such as building stronger security for new frameworks or landing the right partnerships to get access to vital computing systems. 

As for broader AI valuations, Horowitz brushed off talk of froth. "The nominal price is high, but I think the multiples are actually reasonably low compared to 2021," he said, adding that his firm's goal remains to back "30- to 40-year franchises," even out of its growth fund.

Horowitz was also quick to deflect AI bubble concerns. 

"My experience with the bubble is it becomes a bubble when nobody is saying it's a bubble," he said. "When you stop saying it's a bubble, Natasha, and when everybody in the press stops saying it…that's when it's a bubble."

Vercel Starts a Venture Fund

Startup Vercel doubled its annualized revenue to $200 million in nearly a year by developing, designing and running websites and artificial intelligence applications. Now it's looking to invest in some of the same businesses that use its cloud services. 

The firm has launched a venture arm, Vercel Ventures CEO Guillermo Rauch told me. The nine-year-old startup will invest from its balance sheet, which just got a bit richer after the company raised a $300 million financing last month. It isn't clear how much cash Vercel has in the bank. The new venture arm hasn't previously been reported. 

"Sometimes it's about taking bets on earlier-stage technology that is more speculative," said Rauch, who has been an active angel investor for years. "We can act as an earlier-stage partner placing a bet on the technology—and give them hints of what that technology [looks like] at the scale of Vercel." 

Vercel joins a stampede of privately held firms—including Stripe, OpenAI and Databricks—that have launched investment arms to knit ties with younger startups and customers in related fields. Sometimes the bigger firms buy the startups they help finance, as OpenAI tried to do with Cursor maker Anysphere, which is now in the midst of talking to investors about funding at a $30 billion valuation. The bigger firms also often give startups in their venture portfolio early access to new products and AI models. 

Vercel Chief Financial Officer Marten Abrahamsen says Vercel Ventures has no "specific mandate" of types of companies to back but expects to focus on startups that help developers create products. Investing in these companies could also lead to increased adoption of Vercel's software. 

"We also get to know the next-generation infrastructure talent and offer an attractive exit path if of interest to the founder," he said. 

I'd bet that getting closer to the competition doesn't hurt Vercel as it aims to compete with the likes of Cloudflare and Amazon Web Services, as well as offering a coding tool that rivals Cursor-maker Anysphere, OpenAI and Anthropic. 

Joseph Ferrer, head of corporate development at Vercel, runs the venture arm. It's already made its first investment: Unikraft, a cloud-hosting company that says it helps run AI workloads more efficiently, raised a $6 million seed round this week, including from Vercel.

Unikraft CEO Felipe Huici says Vercel's investment gives the startup credibility and potentially helps with future sales to developers and large enterprises. Unikraft will get help from Vercel's staff and will be able to attend events as a partner of Vercel.

"It's a symbiosis," he said. "We [would] have a very sort of notorious, fantastic client, and they get to accelerate their infrastructure."

A message from RBC Capital Markets Five major disruptors are changing the U.S. economic cycle A new set of forces is distorting the economy's response mechanisms and muting the traditional cycle. Listen to the Strategic Alternatives podcast to hear RBC Chief Economist Frances Donald break down what it means for companies, investors, and policymakers.

New From Our Reporters

AI Agenda Andreessen Backs a Startup Developing Tools That Coding Agents Use By Stephanie Palazzolo

AI Agenda OpenAI Is Catching Up To Anthropic in AI Coding By Stephanie Palazzolo

Recommended Newsletter

Upcoming Events

Tuesday, October 28 – Wednesday, October 29 — The Information's 2025 WTF Summit

The rules are changing, fast. AI, volatile markets, and political uncertainty are reshaping business. Join the boldest women at The Information's WTF 2025 Summit in Napa Valley. Limited tickets remain.

More details