AI Investors Are Wooing Startups With Massive Computing Clusters

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AI Investors Are Wooing Startups With Massive Computing Clusters
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I am a senior reporter for technology, covering venture capital and startups. I am based out of Forbes' San Francisco bureau, where I previously covered tech billionaires as a wealth reporter, and wrote about artificial intelligence as an assistant editor for technology.

Nat Friedman and Daniel Gross built a 4,000-chip supercomputer for their startups to use. Andreessen Horowitz is in talks to secure tens of thousands of GPUs for an offering of its own, a source said.Nvidia CEO Jensen Huang shown here holding a CPU designed for AI data centers. The company's A100 and H100 GPUs have been in even higher demand among AI companies.

“It’s important for the Silicon Valley ecosystem that the overachieving outsider and the person working at Google have access to similar amounts of opportunity and compute,” Gross told“Why is an industry so close to cutting edge tech so stagnant?”, a tool that helps software engineers write code that is today one of the generative AI’s first commercial successes with revenues north of $100 million.

Andromeda, then, effectively functions as the large customer capable of shouldering a long-term contract. Friedman and Gross split access to it across dozens of portfolio companies including voice cloner ElevenLabs and video generator, and bill for it based on usage. “We charge a really small margin to cover our operating costs, but we make our money by helping the startups succeed,” Friedman said.

All this experimentation is possible, Gross said, because he and Friedman have a “significantly higher” proportion of their personal money invested into their AI-focused practice compared to industry norms.

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