Nat Friedman, Daniel Gross raise $1B fund

 

A regulatory filing shows that Nat Freidman and Daniel Gross quietly raised an investment fund, dubbed C2 Investment, worth $1B to invest in AI and infrastructure startups.  The duo was in the news last week after Business Insider learned that they are enticing AI startups by offering access to its AI computing chip cluster, which is in short supply.  Friedman and Gross set up an AI cloud service dubbed Andromeda Cluster with 2,512 of Nvidia's H100 GPUs, roughly half the size of Nvidia's in-house supercomputer.  Per Friedman, each unit is worth $40,000, giving the entire cluster a value of over $100M.  Yesterday, British voice AI startup ElevenLabs raised $19M in Series A funding led by Andreessen Horowitz, Nat Freidman, and Daniel Gross.  Large organizations with significant computing power at their disposal, such as Microsoft, Google, and Oracle, were already using this tactic to get equity stakes in promising AI startups, as such startups have high compute needs to train AI models.  Now, other VCs are also considering dedicating part of their funds to buying AI computing chips.  Spark Capital, a backer of AI firm Anthropic, is considering earmarking $50M from its fund for purchasing AI hardware.