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Cathie Wood\u2019s Ark Investment Management has announced that it holds a stake in Silicon Valley artificial intelligence darling OpenAI, a bet that the nascent AI industry will remake the tech landscape.<\/p>\n
In an email to clients Thursday, Ark said, \u201cAs of April 10, 2024, the Ark Venture Fund invests in OpenAI,\u201d referring to its $54 million VC fund. \u201cOpenAI is at the forefront of a Cambrian explosion in artificial intelligence capability,\u201d the tech-focused asset manager said in the note.<\/p>\n
Launched in September 2022, the closed-end Ark fund invests in both public and private firms \u2014 including Elon Musk\u2019s SpaceX<\/a>, Epic Games Inc., Freenome Holdings Inc. and Relation Therapeutics.\u00a0<\/p>\n \u201cOur 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,\u201d Ark Chief Futurist and investment committee member Brett Winton said in an interview. \u201cWe think that there\u2019s $16 trillion in prospective market cap that will be commanded by foundation model-type companies by 2030.\u201d<\/p>\n OpenAI has raised huge sums of money, most of it from Microsoft<\/a> Corp. which has put in\u00a0$13 billion<\/a>. The company has also allowed some employees to sell shares via a so-called tender offer at an\u00a0$86 billion valuation<\/a>. Ark said it invested in the company through a special purpose vehicle, but declined to elaborate. OpenAI didn\u2019t comment on the stake.\u00a0<\/p>\n The startup will represent about 4% of the Ark venture fund\u2019s holdings, Winton said. Ark also has a stake in rival Anthropic, accounting for about 5% of the same fund.<\/p>\n Wood\u2019s\u00a0most famous<\/a>\u00a0vehicle, Ark Innovation ETF, catapulted to fame during the height of the pandemic after making big bets on the likes of Tesla<\/a> Inc. This year, the exchange-traded fund has stumbled following a decline in the share price of the electric carmaker.<\/p>\n The venture fund is made up of mostly private companies \u2014 around 80% of the total holdings. The value of its assets are\u00a0updated daily<\/a>, in an effort to give everyday investors in Ark\u2019s product the fairest value, Winton said.<\/p>\n \u201cThe Sora model is mind blowing,\u201d Winton said, referring to OpenAI\u2019s recently released\u00a0text-to-video<\/a>\u00a0generative AI tool. \u201cThe acceleration in the pace of innovation is mind-blowing and so we wanted the exposure.\u201d<\/p>\n<\/div>\nSubscribe to the CFO Daily newsletter to keep up with the trends, issues, and executives shaping corporate finance. Sign up<\/a> for free.<\/div>\n<\/div>\n