Andreessen Horowitz’s DOJ Probe Turns VC Board Seats Into an Antitrust Test

The U.S. Department of Justice has spent nearly a year investigating whether Andreessen Horowitz broke antitrust law by holding board seats at two data companies that turned into competitors, according to a Bloomberg report corroborated independently by TechCrunch, PYMNTS and other outlets. The inquiry has left venture capitalists across Silicon Valley puzzled about why a rarely enforced, century-old statute is suddenly being pointed at one of the industry’s most prominent firms.

At the center of the investigation are two of Andreessen Horowitz’s portfolio companies: Databricks, the data and AI platform valued at $190 billion, and Fivetran, the data-integration company that combined with dbt Labs in June. Andreessen Horowitz co-founder Ben Horowitz sits on Databricks’ board, while firm partner Martin Casado serves as a director at Fivetran. Neither company disputes that a16z, as the firm is widely known, holds both seats. The question the DOJ is asking is whether that arrangement violates a law written in 1914.

A Rarely Used Antitrust Law Meets Venture Capital

The investigation invokes Section 8 of the Clayton Act, a 112-year-old law that bars an individual from serving as a director of two companies that compete with each other, a practice known as an “interlocking directorate.” Congress passed the provision as part of the original 1914 Clayton Antitrust Act to stop the same individuals from sitting on the boards of rival companies and sharing information that competition law is supposed to keep separate. It was not written with venture capital in mind, and regulators have rarely used it against VC firms, which is part of why Andreessen Horowitz’s situation has drawn so much attention.

According to one Databricks investor who spoke to TechCrunch on condition of anonymity, Databricks and Fivetran were not competitors when Andreessen Horowitz first backed them. Databricks built its name in cloud data storage, while Fivetran specialized in moving data between systems. That changed as both companies expanded into the same territory: Databricks’ Lakeflow product now handles the AI data pipelines and application connectors that make up Fivetran’s core business, especially after Fivetran folded in dbt Labs, a company whose board Martin Casado had also served on before that deal closed.

The DOJ’s review of the Fivetran-dbt Labs merger itself lasted several months and concluded without imposing any conditions, according to Bloomberg’s reporting as cited by PYMNTS. But the broader investigation into the board seats, which began roughly a year ago around the time of that merger review, stayed open after the deal closed. The Justice Department and Databricks declined to comment on the inquiry; Andreessen Horowitz and Fivetran did not respond to Bloomberg’s requests for comment.

Why Venture Capitalists Are Rattled

TechCrunch reported that several VCs it spoke with were surprised by news of the probe, in part because Andreessen Horowitz has backed hundreds of companies over its history. At that scale, some portfolio overlap is close to inevitable as startups pivot or expand, particularly during a boom cycle where AI has pulled companies from adjacent categories into direct competition with one another.

Direct competitor funding by the same VC firm has become fairly normalized in the current AI landscape; multiple firms have backed both OpenAI and Anthropic without triggering this kind of scrutiny. Board seats are a different matter. Directors get access to confidential strategic information that ordinary investors never see, which is precisely the exposure Section 8 was designed to prevent.

One investor told TechCrunch that because Ben Horowitz and Martin Casado are different individuals at the same firm, Andreessen Horowitz could institute a so-called Chinese wall between them, preventing either partner from sharing confidential information about Databricks or Fivetran with the other, a step short of either one actually resigning a board seat. It remains unclear whether that arrangement would satisfy the DOJ.

If it does not, and a16z is eventually forced to give up one of the seats, TechCrunch’s reporting suggests the fallout could reach beyond this single case. Founders may start placing less value on board commitments from top-tier venture firms if those same firms could later be compelled to walk away from a board because of a portfolio conflict that did not exist when the investment was originally made.

An Investigation That Cuts Across the Political Map

What has made the probe especially puzzling to some observers is Andreessen Horowitz’s proximity to the current administration. Marc Andreessen and Ben Horowitz each contributed millions of dollars in 2024 to a political group supporting Donald Trump’s presidential campaign, and the firm has since emerged as an influential participant in debates over federal AI policy, advocating for a lighter regulatory approach. Bloomberg has reported that Andreessen Horowitz successfully pressed the Trump administration to eliminate a number of AI safety restrictions.

The firm’s political giving was not exclusively partisan, however. Later in 2024, Horowitz also contributed $2.5 million to a super PAC supporting Democratic presidential nominee Kamala Harris, according to a Federal Election Commission filing cited in Bloomberg’s reporting. On TechCrunch’s Equity podcast, hosts Kirsten Korosec, Sean O’Kane and Anthony Ha discussed the apparent contradiction of a firm with real access inside the administration facing a DOJ probe anyway. O’Kane pointed out that the same administration has otherwise been light on antitrust follow-through, citing its settlement with Live Nation over Ticketmaster rather than seeking a breakup, and speculated that targeting Andreessen Horowitz might be the DOJ setting an “example” that “smaller firms would follow.”

A Recent Playbook for Interlocking Boards

Separate from that Ticketmaster settlement, the DOJ does have a specific recent precedent for interlocking-directorate cases like this one. During the Biden administration, directors stepped down from roughly a dozen corporate boards, including one at Live Nation Entertainment, after Justice Department scrutiny of potential conflicts involving competing businesses. Those cases were resolved through changes in board membership rather than litigation, the outcome antitrust lawyers generally expect if the Andreessen Horowitz inquiry leads anywhere at all.

What Happens Next

Nothing about the investigation confirms wrongdoing. Bloomberg’s reporting states that the existence of the inquiry does not establish that Andreessen Horowitz, its partners or its portfolio companies violated antitrust law, and no enforcement action has resulted so far. The department’s parallel review of the Fivetran-dbt Labs merger already concluded without conditions, and it is entirely possible the board-seat inquiry ends the same way.

Still, the fact that regulators are examining VC board seats this closely, rather than just merger approvals, is the part of the story that matters most for the venture industry. As AI investment concentrates a smaller number of firms into an ever-larger share of the data and infrastructure market, the kind of portfolio overlap that produced the Databricks-Fivetran situation is likely to keep recurring. Whether the DOJ treats Andreessen Horowitz as an isolated case or as the first of several interlocking-directorate actions in AI will shape how comfortable the next generation of venture capitalists is about taking a board seat at all.