ARK Invest, the investment management firm founded and led by veteran investor Cathie Wood, announced the acquisition of a stake in Elon Musk’s artificial intelligence (AI) startup.
On May 28, the company revealed the stake in xAI through an email to its clients. ARK Chief Futurist Brett Winton said it represents around 2% of the fund’s holdings, according to a report from Bloomberg. He 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.”
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 is another recent AI-related move by ARK Invest. Last month, the firm disclosed 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 said he believes AI foundation models will be worth “multiple trillions of dollars by the end of this decade.”
During the COVID-19 pandemic in 2021, Wood made headlines for her bullish investments in Tesla, another Musk-related company.
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xAI is the Musk's latest venture and was launched in March 2023 in a bid against major players in the AI space like OpenAI, Google and Microsoft.
On May 26, xAI announced that it raised $6 billion in a Series B funding round comprising major investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company and Prince Alwaleed bin Talal and Kingdom Holding, among others.
That particular funding round increased xAI's valuation to approximately $24 billion, marking a significant milestone, especially considering the startup has existed for just over a year. Musk has also hinted at plans to launch a new data center by fall 2025.
The project has been deemed the “Gigafactory of Compute,” and is intended for training and developing the next generation of the company’s Grok AI system.
Musk has remained outspoken about his views on AI and its impact on the future as these developments have emerged.
During a speech at the VivaTech Paris 2024 conference, Musk said that his biggest concern with current models is that they are not “maximally truth-seeking” and instead “pandering to political correctness.”
He has also recently made another statement, saying that soon enough, AI will “do everything better than you” and ultimately make employment obsolete.
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