Investment management solidifies ground on AI with new addition to portfolio
Cathie Wood’s ARK Investment Management LLC, known for its investments in disruptive technologies, has solidified its position in the realm of artificial intelligence (AI) by investing in OpenAI.
“As of April 10, 2024, the ARK Venture Fund invests in OpenAI,” ARK announced, referring to its $54 million venture capital fund, according to a Bloomberg report.
“OpenAI is at the forefront of a Cambrian explosion in artificial intelligence capability,” ARK explained. It described Open AI to have “produced several of the most influential breakthroughs in foundational AI research, including both the GPT and DALLE series of models” as well as introducing “the first major consumer application of generative AI, ChatGPT, which is the fastest application in history to grow to 100 million active users.”
In a recent interview with Barron’s, Cathie Wood, CEO of ARK Invest, expressed optimism about the potential of AI and also acknowledged the nuances involved with adopting new technology.
“Managements are still trying to make sense of AI for their organizations. Companies don’t want different divisions buying all kinds of tools without the economies of scale. To harness AI in the most effective way, they need to pull all of their data from disparate divisions, integrate them into one place, clean it up, and map out their workflows in excruciating detail. It’ll take time,” she told Barron’s. “We’re still trying to understand where value is going to surface in the AI world, since a lot of it is being commoditized by open source models.”
OpenAI counts Microsoft Corporation as a significant investor. According to Investing.com, it recently provided an opportunity for employees to sell shares at an $86 billion valuation.
ARK chief futurist and investment committee member Brett Winton told Bloomberg News that OpenAI represents 4% of Ark Venture’s holdings. He lauded OpenAI’s text-to-video generative AI tool, Sora.
“The acceleration in the pace of innovation is mind-blowing and so we wanted the exposure,” said Winton.
The ARK Venture Fund has investments in other companies including Anthropic, an AI startup backed by tech giant Amazon, Epic Games, SpaceX, and Databricks. It aims to grant investors access to innovative companies across their lifecycle in both private and public markets, according to Investing.com.
