The U.S. Department of Justice has opened an antitrust investigation into venture capital firm Andreessen Horowitz, or a16z, over whether its investment partners improperly served on the boards of competing artificial intelligence companies, according to Bloomberg, citing people familiar with the matter.
The people said the inquiry had not been previously disclosed and requested anonymity because they were discussing nonpublic information.
Databricks and Fivetran are at the center of the case
The companies involved are Databricks Inc. and Fivetran Inc., both backed by Andreessen Horowitz and both focused on helping enterprise customers collect, organize, and analyze large volumes of data.
Andreessen Horowitz co-founder Ben Horowitz serves on Databricks’ board, while partner Martin Casado sits on the board of Fivetran, the people said.
Casado also previously served on the board of dbt labs, another company in the same segment. Fivetran acquired dbt labs in June.
According to the people, the Justice Department spent months reviewing that transaction after it was announced in October last year and ultimately approved the acquisition without conditions. Even after the deal closed, the broader investigation into Andreessen Horowitz continued. The probe began at roughly the same time as the merger review and has been ongoing for nearly a year.
Responses and the usual remedy in similar cases
A spokesperson for Databricks and a spokesperson for the Justice Department declined to comment. Spokespeople for Andreessen Horowitz and Fivetran did not respond to requests for comment.
In cases like this, regulators often resolve the issue by requiring a director to step down from one of the competing companies’ boards. During the Biden administration, that was the approach used in several similar matters. More than a dozen companies, including Live Nation Entertainment Inc., saw directors resign to remove potential conflicts.
White House ties add to the scrutiny
The investigation is drawing added attention because Andreessen Horowitz has close ties to the second Trump administration. Bloomberg reported that the firm has built connections with the White House, and parts of its technology portfolio could benefit from looser regulation. Members of the firm’s team have also been active in Washington pushing for related policy changes.
According to Bloomberg, in 2024 Ben Horowitz and fellow co-founder Marc Andreessen each donated millions of dollars to groups backing then-presidential candidate Donald Trump. The firm has also been a prominent voice in AI policy and successfully pushed the current administration to roll back several AI safety restrictions. In the second half of 2024, Ben Horowitz also donated $2.5 million to a super PAC supporting Democratic presidential candidate Kamala Harris.
People familiar with the matter said the Justice Department has not decided how it will proceed and may ultimately take no action.
Probe revives use of a 1914 law on interlocking directorates
The investigation extends a regulatory focus that took shape during the Biden administration: using a rarely invoked 1914 law to challenge interlocking directorates, a term for situations where a person or institution holds board positions at two direct competitors.
Under former Assistant Attorney General Jonathan Kanter, the Justice Department repeatedly pushed directors to leave board seats to address that risk. In 2021, Endeavor Group Holdings Chief Executive Officer Ari Emanuel left Live Nation’s board. From 2022 through 2023, directors at more than a dozen other companies also stepped down.
a16z may challenge how the law applies
This case has an unusual feature. The issue is not that one individual sat on the boards of two competing companies. Instead, the concern is that multiple partners from the same venture firm held separate board seats across rival businesses.
The report said the statute applies to both individuals and companies, and a small number of courts have accepted that reading. Even so, Andreessen Horowitz may use that point to challenge any government claim.
a16z’s fundraising and AI portfolio
As of January this year, Andreessen Horowitz had $90 billion in assets under management, making it one of the world’s most financially powerful venture firms. It recently raised a $15 billion fund, which the report described as the largest single fundraising in history, with capital earmarked for startups across sectors.
The firm has invested billions of dollars in artificial intelligence startups, including coding startup Cursor, which was recently acquired by SpaceX, and voice AI company ElevenLabs. It is also a major investor in SpaceX, which completed its listing in June, and has exposure to OpenAI, which is planning to launch an IPO in the near term.
Databricks is also one of the more likely IPO candidates in Andreessen Horowitz’s portfolio. Ben Horowitz has led financing rounds since Databricks’ $14 million first round in 2013. Last week, Databricks said it had raised a new $5 billion round that valued the company at $190 billion.