ARK Invest, the investment management firm founded and led by experienced investor Cathie Wood, has announced its acquisition of a stake in Elon Musk’s artificial intelligence (AI) startup. The company revealed this stake in xAI through an email to its clients on May 28. According to a report from Bloomberg, ARK Chief Futurist Brett Winton stated that the stake represents approximately 2% of the fund’s holdings. This investment is part of ARK Invest’s recent focus on AI-related ventures. Last month, the firm disclosed that 4% of its holdings are in OpenAI, the creator of ChatGPT, and 5% of its assets are in Anthropic, the company behind the Claude AI model. Winton believes that AI foundation models will be worth “multiple trillions of dollars by the end of this decade.”
During the COVID-19 pandemic in 2021, Wood gained attention for her optimistic investments in Tesla, another company associated with Musk. xAI, Musk’s latest venture, was launched in March 2023 as a competitor to major players in the AI industry like OpenAI, Google, and Microsoft.
On May 26, xAI announced that it raised $6 billion in a Series B funding round. This round included major investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed bin Talal, and Kingdom Holding, among others. The funding round increased xAI’s valuation to approximately $24 billion, which is a significant achievement considering the startup’s relatively short existence of just over a year. Musk has also hinted at plans to launch a new data center by fall 2025, referred to as the “Gigafactory of Compute.” This facility aims to train and develop the next generation of the company’s Grok AI system.
Musk has been vocal about his views on AI and its impact on the future. During a speech at the VivaTech Paris 2024 conference, he expressed concern that current AI models are not “maximally truth-seeking” and instead cater to political correctness. He also recently stated that AI will soon surpass human capabilities and render employment obsolete.
In the world of AI, OpenAI’s recent advancements have outshined Google, with its “iPhone moment” taking center stage. This development has overshadowed concerns related to AI-generated lies, pornography, and online dating. The AI industry continues to evolve rapidly, with ARK Invest positioning itself to capitalize on this growth.