The Justice Department has launched a probing investigation into venture capital firm Andreessen Horowitz (a16z) over its partners serving on the boards of competing companies, raising questions about corporate ethics in tech.

This long-running inquiry centers specifically around Ben Horowitz’s board seat at Databricks and Martin Casado’s role at Fivetran. Both startups are now valued significantly—Databricks alone is worth $190 billion—but weren’t direct rivals when a16z first invested, according to an anonymous investor.

Given the trend of backing competing startups, such as Anthropic and OpenAI, the issue becomes more complex with board members from the same firm potentially sharing sensitive information. To mitigate conflicts, a so-called 'Chinese wall' could be implemented, but this still leaves founders wary of VCs’ commitment to long-term support.

The investigation hinges on Section 8 of the Clayton Act, which prohibits individuals or entities from serving on competing boards. This is rarely enforced against venture capitalists, making this probe significant for the tech industry and its regulatory landscape. If a16z must cede a board seat, it could signal a shift in founders’ perceptions of VC value.