US Department of Justice investigating Andreessen Horowitz fund

Marc Andreessen. Photo: By JD Lasica

One of the largest and most prominent venture capital funds in Silicon Valley and the world, Andreessen Horowitz (a16z), is under investigation by the US Department of Justice regarding antitrust issues. At the center of the investigation is the suspicion that partners at a16z serve as directors in AI and data companies that are ostensibly competitors.

The suspicion: conflict of interest

The investigation, which has been ongoing for nearly a year and is only now being made public, focuses primarily on two prominent companies in the a16z investment portfolio. The first is Databricks, which develops data processing and analysis platforms and is considered one of the most valuable private companies in the world, recently valued at $190 billion; the second is Fivetran, which develops data collection and profiling tools for organizations.

According to the suspicion, because the fund's founder, Ben Horowitz, serves on the board of directors of Databricks, and the fund's partner, Martin Casado, sits on the board of directors of Fivetran, there is a suspected violation of the Clayton Act. This long-standing law, enacted over 100 years ago, prohibits the parallel service of the same entity or person on the boards of directors of competing companies due to concerns about harming free competition.

Another interesting point is that Casado previously served as a director at dbt Labs, which was acquired last June by Fivetran, where he currently serves as a director. At the time, the Department of Justice examined the acquisition deal for months and eventually approved it without special conditions.

Although the investigation has not yet concluded, the Department of Justice has not yet made a final decision. It is important to remember that in the past, similar cases were resolved after one of the directors simply resigned from the board of directors.

Assets worth $90 billion

The investigation against Andreessen Horowitz is also notable due to the fund's growing involvement in American politics and the connections it has forged in Washington, primarily through the large sums of money it pours there.

Just this year, a16z and its founders, Marc Andreessen and Ben Horowitz, have poured more than $115 million into American politics, mainly through Super PACs—political influence groups that support candidates who promote their agenda. Of this total, slightly less than half came directly from the fund, while the rest came from the founders' private pockets.

For example, tens of millions of dollars were directed to Fairshake, an influence group that supports politicians promoting crypto-friendly policies in the USA. About $50 million more was invested in Leading the Future, a body that promotes pro-AI policy and supports candidates who prefer rapid development over restrictive regulation. In addition, millions of dollars were donated to MAGA Inc., an organization supporting the agenda of Donald Trump and the Republican Party, with smaller amounts transferred to causes identified with the Democratic Party.