Nat Friedman and Daniel Gross, a pair of founders turned startup investors, set the venture capital world abuzz last week by announcing a novel tactic to win over founders: offering them access to a huge number of free servers equipped with the most advanced chips for training machine-learning models. It turns out the duo also quietly raised an investment fund with more than $1 billion in assets to invest in artificial intelligence and infrastructure startups, according to a regulatory filing and Friedman’s personal website.

Rival venture capitalists say they are closely watching Friedman, the former CEO of Microsoft-owned GitHub, and Gross, a former investment partner at startup accelerator Y Combinator, to see whether their server-chip offer to founders gives them an edge in landing AI startup deals. The chips have been in extraordinarily short supply as demand for AI has heated up.