Why Andreessen Horowitz Says Foreign Founders Now Have the Edge in AI

Andreessen Horowitz says international entrepreneurs now hold an advantage over their American counterparts in the current AI investment cycle, according to general partner Angela Strange and partner Gabriel Vasquez. The firm reports that 44% of investments across its Apps Fund One and Two feature an international founder (TechCrunch).

Strange and Vasquez, who lead a16z's Borderless Founder network, wrote that there is now an edge to keeping one foot in your home country and one foot in Silicon Valley. The Borderless Founder initiative started more than five years ago on the idea that many of the best founders in the world will come from outside the U.S. It has since grown from a theory into a structural part of how the firm finds deals. a16z now spends more than one million air miles pursuing international startups rather than expecting every team to relocate to California.

The driving force behind the shift, as Vasquez describes it, is AI-driven demand from businesses. In the past, companies outside the U.S. were slow to adopt new technology and unwilling to spend much on it. That has changed dramatically over the last three to five years. AI pushed established companies to realize they would need to buy third-party software to stay competitive, and international startups are the ones selling to them.

Vasquez said a16z initially expected that international early-stage startups working with Fortune 500 companies might be an exception. It turned out to be a clear pattern. AI agents — software programs that run autonomously, are "always on," and are increasingly accurate — have become standard in customer service, even in regions with cheap labor like Latin America, where software adoption had historically been low.

The gap American startups leave open is structural rather than strategic. U.S.-based startups simply cannot move fast enough to serve the entire global enterprise AI market from day one, so they prioritize domestic customers. That leaves room for local founders to sell AI solutions in their own countries, where they have existing relationships, language fluency, and regulatory knowledge that a Silicon Valley team cannot quickly match.

The a16z Show podcast notes additional advantages that borderless founders bring, including distinct talent networks, early customers, and strong local brands and communities. The combination of local market access and Silicon Valley capital networks creates a competitive position that purely domestic teams struggle to replicate.

Sovereign interest is also part of the picture. Poland recently took a stake in a16z portfolio company ElevenLabs, a voice AI startup, showing that international demand for AI infrastructure extends beyond corporate buyers to nation-state actors.

The broader context here is worth pausing on. For most of the post-internet era, the implicit model for venture-backed startups was full relocation to the Bay Area. Talent, capital, and customers concentrated in one geographic cluster, and founders who stayed home were seen as accepting a structural disadvantage. What a16z is describing is the inversion of that model: in an AI cycle where enterprise demand is global, fast-moving, and growing faster than any single startup can serve, being local to a non-U.S. market is itself the moat — the competitive advantage that protects a business. The founder who understands a specific country's purchasing cycles, labor dynamics, and regulatory environment can close deals that a U.S. team would not even know existed.

In this author's view, the deeper signal is that AI is expanding the addressable market for enterprise software faster than it is expanding the supply of teams capable of serving it. The constraint is no longer distribution infrastructure or payment systems; it is founder proximity to demand. If that holds, the competitive map of enterprise AI will look fundamentally different from the SaaS era, where U.S. companies captured global markets from a single ZIP code. Whether international founders can turn early local traction into durable global companies, or whether U.S. incumbents will eventually catch up as they expand internationally, is the question that will define the next phase of this cycle.