Andreessen Horowitz said Tuesday that it raised $7.2 billion across five different funds, a sign of optimism in the tech startup world, which has seen a dearth of significant exits over the past two years.

“This marks an important milestone for us,” Ben Horowitz, who co-founded the firm with Marc Andreessen in 2009, wrote in a blog post.

The biggest chunk of new funding is in Andreessen Horowitz’s growth fund, which reeled in $3.75 billion. That money gets invested in later-stage companies that are viewed as closer to going public, or capital-intensive businesses that require big checks.

Horowitz said in the post that $1.25 billion will be dedicated to infrastructure, which includes artificial intelligence investments, while $1 billion will go to app investments, $600 million to games and another $600 million to what the firm calls American Dynamism, or “founders and companies that support the national interest.” That includes aerospace, defense, education and housing.

The firm had initially aimed to raise $6.9 billion from investors for a new set of funds, including two with an AI focus, Bloomberg previously reported. AI investing has been red hot in Silicon Valley and beyond, while the broader market has been in a downturn.

Since 2021, when tech IPOs and startup investing surged to a record, venture investors have closed their wallets. Soaring inflation and rising interest rates in 2022 pushed investors out of risky assets and forced cash-burning startups to dramatically cut costs. Even with the stock market recovering, venture deals have remained depressed.

Deal volume for U.S. venture investments in the first quarter sank to its lowest level since 2017, according to data published earlier this month by PitchBook. The story was similar across the globe, with worldwide volume reaching its lowest since 2016 and total deal value falling to a level not seen since 2019.

Meanwhile, there have been very few tech IPOs since the end of 2021. Reddit and Astera Labs went public in the first quarter, the first venture-backed tech companies to debut since September. They accounted for 73.4% of total exit value in the U.S. in the period, according to PitchBook.

Horowitz made no reference to the market slowdown in his post. Nor did he suggest that any new funding will be dedicated to cryptocurrencies, an area where Andreessen Horowitz was particularly bullish during the crypto craze that lifted bitcoin to a record in 2021. The firm raised a $4.5 billion crypto fund in 2022, bringing its total amount raised for crypto and blockchain investments to $7.6 billion.

Andreessen Horowitz remains on track to raise more money for its crypto fund and a separate biotechnology fund, a person familiar with the matter told Bloomberg. The firm didn’t immediately respond to a request for comment.

One of Andreessen Horowitz’s more notable bets of the past couple years involved WeWork’s controversial co-founder Adam Neumann and his new startup called Flow. Andreessen Horowitz wrote a $350 million check to the company, which was just getting started and has yet to make inroads in the residential real estate market.

Andreessen Horowitz said in a blog post at the time that Neumann’s efforts to redesign the office experience at WeWork are “often under appreciated” and that the firm loves “seeing repeat-founders build on past successes by growing from lessons learned.”

WATCH: Adam Neumann deserves second shot, CEO says

Microsoft will invest $1.5 billion into G42, an artificial intelligence firm based in the United Arab Emirates, as the U.S. giant looks to strengthen its position in the technology amid fast-rising competition.

Microsoft President Brad Smith will join the board of directors of G42. The investment expands an existing partnership between the two firms, with Microsoft now taking a minority stake.

G42 will run its AI applications and services on the Microsoft Azure cloud service, as well as deploy Microsoft’s cloud offerings.

G42 runs data centers and sells AI applications. The company has developed an Arabic large language model called Jais, which will be offered via Azure.

G42 itself has reportedly invested in Chinese firms, including TikTok owner ByteDance.

SHENZHEN — Baidu CEO Robin Li said Tuesday the company’s ChatGPT-like Ernie bot has exceeded 200 million users.

He added the company would hold another round of its AI development competition, and offer a prize of 50 million yuan ($7 million).

Li, who is also co-founder and chairman of Baidu, was delivering an opening speech titled “Everyone is a Developer” at Baidu’s AI Create conference. About 5,000 people were in attendance at the event, according to the company.

Li demonstrated three development tools—AgentBuilder, AppBuilder, and ModelBuilder. The tools create and integrate AI-powered chatbots with Baidu web search, or allow users to create applications without any coding knowledge, according to the company.

Baidu released its ChatGPT-like chatbot Ernie bot more than a year ago, and received the green light from Beijing for public use in August.

The chatbot is based on Baidu’s large language model Ernie. Smartphone companies Samsung and Honor have integrated Ernie’s AI capabilities with certain mobile devices.

As of December, about 26,000 businesses were actively accessing Ernie’s capabilities on a monthly basis, according to Baidu. Ernie was handling more than 50 million queries every day, the company claimed.

“In 2024, we expect AI revenues contribution to become more meaningful, while our core business will remain resilient,” Li said during a late February earnings call, according to a FactSet transcript.

Baidu is set to release first-quarter results on May 16.

The global rush to develop AI capabilities, especially tapping the tech’s ability to generate content, has led to a surge in demand for Nvidia’s graphics processing units. Those chips are critical for providing the computing power needed to run and train AI large language models.

U.S. export controls, announced in the last two years, have restricted China’s access to such high-end semiconductors.

Li said in February that Baidu’s AI chip reserve “enables us to continue enhancing Ernie for the next one or two years.”

Earlier this month, Alibaba Chairman Joe Tsai said in an interview with Norges Bank Investment Management that he estimated that China was about two years behind the U.S. in terms of AI development.

Many analysts expect Chinese companies will be able to find an AI edge on the application front.

China’s AI market — consisting mostly of hardware, followed by software and services — is set to exceed $26 billion in size by 2026, up from just under $15 billion last year, according to Barclays estimates.

The analysts estimate China’s spending on “digital transformation” will grow by 19.2% between 2023 and 2026, outpacing a projected worldwide increase of 15.6%.

— CNBC’s Michael Bloom contributed to this report.