The announcement of Cathie Wood’s Ark Investment Management’s investment in OpenAI, a major participant in Silicon Valley’s artificial intelligence space, has garnered media attention. Wood believes AI has the potential to revolutionize technology, and this decision demonstrates her belief in that potential.
Clients were notified via email on Thursday that Ark’s Venture Fund, which manages a $54 million venture capital fund, has invested in OpenAI. Ark highlighted the potential of OpenAI to transform sectors, describing it as at the front of a “explosion” in artificial intelligence capabilities.
Ark’s closed-end interval fund was founded in September 2022 and is primarily focused on investing in private and public firms. SpaceX, Epic Games Inc., Freenome Holdings Inc., and Relation Therapeutics are a few of its noteworthy holdings.
Chief futurist and member of Ark’s investment committee Brett Winton highlighted the substantial market potential and expressed excitement about the industry’s rapid advancement in AI. According to his projections, by 2030, enterprises that utilize foundation models might command a market worth of up to $16 trillion.
OpenAI has received significant funding, mainly from Microsoft Corp., which has contributed $13 billion in total. Through a tender offer, the startup recently permitted employees to sell shares at a worth of $86 billion. Although Ark used a special purpose vehicle to declare its investment in OpenAI, no specifics were provided.
According to Winton, OpenAI will own about 4% of Ark’s venture fund holdings. Additionally, the company owns about 5% of the same fund in rival Anthropic.
Wood’s well-known investment instrument, the Ark Innovation ETF, rose to notoriety during the pandemic due to its audacious wagers on businesses such as Tesla Inc. Nevertheless, since Tesla’s stock price dropped this year, the ETF has had difficulties.
Approximately 80% of the companies held by Ark’s venture fund are private companies. Every day, the fund’s assets are updated to guarantee investors’ fairness and transparency.
Winton highlighted the company’s intention to take advantage of the quick speed of innovation in the AI industry and commended OpenAI for their ground-breaking Sora model, a text-to-video generative AI tool.
Although Winton acknowledged the possible drawbacks of OpenAI’s distinct corporate governance structure, he also highlighted the technology’s potential advantages. He compared AI to nuclear power and said that legislative barriers would impede advancement, but in the end, he was upbeat about AI’s potential to revolutionize society.
Here’s a list of stocks in the AI sector:
- Nvidia Corporation (NVDA)
- Alphabet Inc. (GOOG)
- Microsoft Corporation (MSFT)
- International Business Machines Corporation (IBM)
- Advanced Micro Devices, Inc. (AMD)
- Baidu, Inc. (BIDU)
- Intel Corporation (INTC)
- Salesforce.com, Inc. (CRM)
- Amazon.com, Inc. (AMZN)
- Tencent Holdings Limited (TCEHY)
- Facebook, Inc. (FB)
- Twilio Inc. (TWLO)
- C3.ai, Inc. (AI)
- Palantir Technologies Inc. (PLTR)
- Alibaba Group Holding Limited (BABA)
Shayne Heffernan
