AI-ndreessen Horowitz
Mega deals require mega funds.
As the price of top AI deals skyrockets, is AI investing turning into a "rich get richer" game?
Andreessen Horowitz is the current King of the Hill – with the most AI investments out of any investor and early investments into OpenAI, Databricks, xAI, Anduril, Safe Superintelligence, Shield AI, and Mistral AI. The firm's rumored fresh $20B fund positions the firm to continue to dominate the space.
AI companies are attracting unprecedented investment levels, with deal sizes that dwarf those in other sectors. Q1'25 saw global venture funding rise to $121B, with AI mega-rounds ($100M+) accounting for 70% of all funding.
Why?
1) High Costs
Building cutting-edge AI requires enormous capital investment across infrastructure, talent, and energy costs.
2) High Multiples
AI companies command significantly higher valuation multiples than other sectors: median revenue multiple for AI companies is approximately 29.7x with LLM vendors specifically commanding even higher multiples at 54.8x revenue.
The AI race has created intense competition among investors – all seeking to establish strategic positions in the evolving AI ecosystem.
Already, a16z has invested multiple rounds into 11 AI companies that have each raised over $1B+ in total funding. Which growth-stage companies are the next mega deal targets?