Ben Horowitz and Raghu Raghuram first met at Netscape, in very completely different lives.
Horowitz took on the then-very-early-career Raghuram as a product supervisor on the seminal dotcom era browser company. Within the a long time since, Horowitz went on to construct VC large Andreessen Horowitz (a16z), whereas Raghuram took his personal path to VMware, rising to CEO in 2021, and two years later shepherding the cloud infrastructure large by its $69 billion acquisition by Broadcom.
This week, the 2 former colleagues have been reunited with Raghuram becoming a member of a16z as a managing companion. Raghuram, who will probably be a normal companion on the agency’s AI infrastructure and development groups, is becoming a member of a16z at a time of nice change—each within the VC enterprise and, because of AI, throughout the tech business.
I sat down with Horowitz and Raghuram to debate a few of these adjustments, and to study extra concerning the alternatives and challenges that the VC agency, and its latest companion, are serious about.
“We’re shifting from a deterministic manner of computing to a probabilistic manner of computing,” mentioned Raghuram, including that the AI shift means every little thing about “what the world of computing ought to appear like” must be rethought.
“Reasoning functionality goes to grow to be plentiful and really low-cost over time,” Raghuram defined. “When you basically perceive that we’re constructing for the world of reasoning abundance, there’s alternative in enterprise, client, and throughout varied sectors.”
Horowitz described it as “in all probability the most important alternative set that we’ve seen since we have been a agency, as we’ve sort of reinvented all of computing.”
Now 16 years previous, Andreessen Horowitz has developed rather a lot since its founding in 2009. The VC agency, with greater than $40 billion in property beneath administration, has expanded into private wealth management and public market investing, and shocked Silicon Valley through the 2024 presidential election by coming out as a vocal supporter of Trump.
AI opens up much more alternatives to take a position and to construct startups, with the VC industry more reliant on AI investments than ever before. Nonetheless, Horowitz confused that a16z’s imaginative and prescient stays firmly rooted in founders.
“We’re not going to grow to be a personal fairness agency the place we purchase a bunch of corporations, roll them up, and use AI to, say, fireplace the workers extra effectively,” mentioned Horowitz. “That’s simply not our factor. We’re dream builders, and we wish to assist folks construct new issues.”
In some sense, Horowitz informed Fortune, Raghuram is now filling a gap left vacant by Scott Kupor, who joined the Trump administration to guide the U.S. Workplace of Personnel Administration from a16z in April. I requested Horowitz what function politics performs in how he’s serious about the investing panorama. He emphasised three areas: elevated readability round crypto, his optimism about Trump’s AI govt order, and his hopes round uncommon earth mineral mining and manufacturing, particularly for protection. He additionally addressed immigration, as controversy mounts round how the Trump administration is handling H-1B visas.
“The immigration factor is simply very sophisticated,” he mentioned. “Half the H-1B visas have gone to those massive consulting companies, on the lookout for cheaper labor, significantly the large Indian consulting companies. That must be cleaned up.”
Horowitz authored The Exhausting Factor About Exhausting Issues greater than a decade in the past, and I requested him and Raghuram about an remark from the ebook I’ve considered many occasions: That what makes onerous issues onerous is that there are “no simple solutions or playbooks.” What are every of them presently serious about, the place there aren’t any simple solutions?
For Horowitz: “I’d say the most important one is the connection with China. There are such a lot of tremendously proficient Chinese language-People, and there are numerous Chinese language nationals within the U.S. who’re serving to our corporations. We do have this robust diplomatic scenario with them, each on commerce and nationwide safety. Proper now, we’re positively not investing in China for apparent causes. Lengthy-term, how that scenario goes to play out and the way we should always give it some thought is difficult.”
For Raghuram, he’s grappling with how labor will probably be affected by AI: “How do you deploy your assets?” he mentioned. “As you lay out folks to do a job or AI, what’s the proper level of the spectrum at that cut-off date, and the way do you navigate it? And if you happen to mixture that throughout our corporations, and society, how do you cope with that change?”
