June 5, 2024
Cathie Wood Puts $60M into Musk's AI Venture
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Cathie Wood Puts $60M into Musk’s AI Venture

ARK Invest, the investment management firm founded and led by veteran investor Cathie Wood, has announced the acquisition of a stake in Elon Musk’s artificial intelligence (AI) startup, xAI.

On May 28, the company disclosed its stake in xAI through an email to its clients. ARK Chief Futurist Brett Winton noted that the investment represents around 2% of the fund’s holdings, according to a report from Bloomberg. He stated:

“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.”

On May 10, X introduced AI-curated audiences, which allow advertisers to define target audiences while X’s AI generates relevant user pools.

This investment marks another recent AI-related move by ARK Invest. Last month, the firm revealed that 4% of its entire holdings are in OpenAI, the creator of ChatGPT, and 5% of its assets are in Anthropic, the company behind the Claude AI model. Winton expressed confidence in the future value of AI foundation models, predicting they will be worth “multiple trillions of dollars by the end of this decade.”

During the COVID-19 pandemic in 2021, Cathie Wood gained attention for her bullish investments in Tesla, another company associated with Elon Musk.

xAI’s Rapid Growth and Recent Funding

xAI, Musk’s latest venture, was launched in March 2023 to compete with major players in the AI space such as 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 like Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, Prince Alwaleed bin Talal, and Kingdom Holding, among others.

The recent funding round increased xAI’s valuation to approximately $24 billion, marking a significant milestone given the startup has been in existence for just over a year. Additionally, Musk has hinted at plans to launch a new data center by fall 2025. This project, referred to as the “Gigafactory of Compute,” aims to train and develop the next generation of the company’s Grok AI system.

Musk’s Vision for AI and Future Developments

Musk has been vocal about his views on AI and its potential impact on the future. During a speech at the VivaTech Paris 2024 conference, Musk expressed his concerns about current AI models, stating that his biggest worry is that they are not “maximally truth-seeking” and instead “pandering to political correctness.”

He also recently made a bold statement, claiming that AI will soon “do everything better than you” and eventually make employment obsolete.

As these developments unfold, ARK Invest’s acquisition of a stake in xAI highlights its commitment to AI and its confidence in the transformative potential of AI technologies. With its strategic investments in xAI, OpenAI, and Anthropic, ARK Invest continues to position itself at the forefront of AI innovation, anticipating significant growth and value creation in the coming years.

Image by Barta IV from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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