Ark Investment Management, led by Cathie Wood, has invested in Silicon Valley AI startup OpenAI, betting that the technology will transform IT. Ark emailing clients Thursday said, “As of April 10, 2024, the Ark Venture Fund invests in OpenAI,” referring to its $54 million VC fund. “OpenAI is at the forefront of a Cambrian explosion in artificial intelligence capability,” the tech-focused asset management wrote.
The closed-end interval fund, launched in September 2022, invests in public and private companies like SpaceX, Epic Games, Freenome Holdings, and Relation Therapeutics.
Our fund is relatively new and small, and for us, honestly, the incremental progress in the foundation model space has been quicker than even we had anticipated,” Ark Chief Futurist and investment committee member Brett Winton said in an interview We estimate that foundation model-type enterprises will control $16 trillion by 2030.
Most of OpenAI's $13 billion funding came from Microsoft Corp. The corporation also permitted some employees to sell shares via tender offer at $86 billion. Ark stated it invested in the company through a special vehicle but did not specify. The shareholding was not mentioned by OpenAI.
Winton estimated that the Ark venture fund will control 4% of the business. Ark owns around 5% of rival Anthropic's fund. Wood's Ark Innovation ETF, which made huge bets on Tesla Inc. during the pandemic, became famous. The exchange-traded fund fell this year as the electric carmaker's share price fell.
About 80% of the venture fund's holdings are private enterprises. Winton said Ark updates its asset values daily to give everyday investors the fairest value.
“The Sora model is mind blowing,” Winton remarked of OpenAI's new text-to-video generative AI tool. “The acceleration of innovation is mind-blowing and so we wanted exposure.” Winton acknowledged OpenAI's unconventional corporate governance structure's risks, but most digital platforms are risky.
“Nuclear power is an amazing technology that was effectively derailed because of the regulatory burdens put upon it back in the 1970s,” he told Bloomberg Television Friday. “That could happen with AI as well, where we worry about something and deny ourselves of all its benefits.”
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