The U.S. Department of Justice is investigating venture capital firm Andreessen Horowitz, or a16z, over whether its investment partners improperly held board seats at competing artificial intelligence companies, according to people familiar with the matter cited by Bloomberg. The inquiry has been underway for nearly a year and had not been publicly disclosed before.
The companies at the center of the matter are Databricks Inc. and Fivetran Inc., both backed by Andreessen Horowitz. Ben Horowitz, the firm’s co-founder, sits on the Databricks board, while partner Martin Casado sits on the Fivetran board. Both companies sell products that help enterprises collect, organize and analyze large volumes of data.
Probe ran alongside review of the dbt Labs deal
Casado also previously served on the board of dbt Labs, another company in the same category. Fivetran acquired dbt Labs in June. People familiar with the matter said the DOJ spent months reviewing that transaction after it was announced in October last year, then cleared it without conditions.
Those people said the broader inquiry into Andreessen Horowitz began at roughly the same time as the merger review and has continued even after the acquisition closed. A spokesperson for Databricks and a DOJ spokesperson declined to comment. Spokespeople for Andreessen Horowitz and Fivetran did not respond to requests for comment.
Focus is on interlocking directorates
The investigation extends a Biden-era antitrust priority: using a rarely invoked 1914 law to police interlocking directorates, a situation in which a person or entity holds board seats at two directly competing companies.
In cases like this, the usual resolution is to require a director to resign from one of the competing boards. During the Biden administration, that approach was used repeatedly. Directors tied to more than a dozen companies, including Live Nation Entertainment Inc., stepped down to remove the conflict. In 2021, Ari Emanuel, then chief executive officer of Endeavor Group Holdings, left Live Nation’s board. Between 2022 and 2023, directors at more than 10 other companies also resigned.
What makes the a16z case different
This case stands apart because the alleged conflict does not involve one individual sitting on two competing boards. Instead, the issue is whether multiple partners from the same firm can trigger the same prohibition by serving on rival boards. The law applies to both individuals and corporations, and a small number of courts have accepted that reading. Even so, Andreessen Horowitz could use that point to challenge any government claim.
People familiar with the matter said the DOJ has not decided what action to take, if any. The investigation could still end without a case.
Political ties add to the scrutiny
The report said the probe is drawing extra attention because Andreessen Horowitz has close ties to the second Trump administration. The firm has built connections with the White House, and its technology portfolio could benefit from looser regulation. Members of its team have also been active in Washington on policy issues.
Bloomberg reported that in 2024, Ben Horowitz and co-founder Marc Andreessen each donated millions of dollars to groups supporting then-presidential candidate Donald Trump. The firm has also been a vocal participant in AI policy debates and successfully pushed for the current administration to roll back several safety restrictions on AI applications. In the second half of 2024, Ben Horowitz also donated $2.5 million to a super PAC backing Democratic presidential candidate Kamala Harris.
a16z’s scale and its Databricks stake
As of January this year, Andreessen Horowitz managed $90 billion in assets, making it one of the world’s largest venture capital firms by available capital. The firm recently raised a $15 billion fund, described in the report as the largest single fundraising in its history, with capital intended for startups across sectors.
Andreessen Horowitz has invested billions of dollars in AI startups, including Cursor, the code development startup recently acquired by SpaceX, and voice AI company ElevenLabs. It is also a major investor in SpaceX, which went public in June, and has exposure to OpenAI, which is planning to launch an IPO in the near term.
Databricks is another potentially public company in the Andreessen Horowitz portfolio. Ben Horowitz has led the company’s financing since its $14 million first round in 2013. Bloomberg said that investment could deliver returns worth billions of dollars. Last week, Databricks said it had raised another $5 billion, valuing the company at $190 billion.
