Cathie Wood's Ark invests in Elon Musk’s xAI
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The news: Cathie Wood’s Ark Investment Management has purchased a stake in Elon Musk’s artificial intelligence startup xAI, as part of an increasing bet on the nascent AI industry, Bloomberg reported.
The numbers: Wood’s USD60 million ($90.36 million) Ark Venture Fund revealed the stake in an email to clients. The stake represents about 2% of the fund’s holdings, and the purchase comes a month after the fund disclosed a position in ChatGPT creator OpenAI that makes up roughly 4% of its holdings. It also holds a stake in AI firm Anthropic, accounting for about 5.5% of assets.
Since the fund's inception in September 2022, it has returned cumulative 21.47% compared to the S&P500 Index return of 31.86% and the MSCI World Index return of 31.78%.
The context: Musk’s xAI, which was launched in 2023, announced earlier this week that it raised USD6 billion ($9 billion) via a series B funding round. Musk has been an early supporter of AI and at one point backed OpenAI before it introduced ChatGPT in late 2022.
Wood’s Ark Venture Fund invests in both public and private firms, including Musk’s SpaceX, Epic Games, Freenome Holdings and Relation Therapeutics.
What they said: “xAI’s access to X’s distribution and real-time data differentiates it from any other AI play, particularly when combined with Elon Musk’s maniacal focus on velocity,” Ark chief futurist Brett Winton told Bloomberg.
“AI foundation models are going to be worth multiple trillions of dollars by the end of this decade.”
The sources: Bloomberg, ARK Venture Fund
