“Cambrian Explosion”: Cathi Wood bets on AI giant OpenAI

“Cambrian explosion”
Cathi Wood is betting on AI giant OpenAI

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Tech investor Cathy Wood recognized the potential of artificial intelligence early on. Despite the fact that her special fund continues to lose value this year, she is sticking to her strategy. The Ark Venture Fund invests in OpenAI, the AI ​​top dog par excellence.

Star investor Cathi Wood’s investment company Ark Investment Management is joining OpenAI. According to an email to its clients, the Ark Venture Fund has been investing in the leading company in the field of artificial intelligence since last Wednesday. “OpenAI is at the forefront of a Cambrian Explosion in the ability of artificial intelligence,” the financial portal Bloomberg quotes from a statement. In the early Cambrian period, around 543 to 530 million years ago, there was a sharp increase in biodiversity in a short period of time.

In the future, OpenAI will make up around 4 percent of the Ark Venture fund, while rival Anthropic will take around 5 percent of the fund. The venture capital fund, worth just $54 million, was launched in September 2022 and invests in both publicly traded and private companies. Among them: Elon Musk’s SpaceX, Epic Games, Freenome Holdings and Relation Therapeutics. Microsoft is a major shareholder in OpenAI. At the beginning of 2023, the group significantly expanded its stake and has so far invested a total of more than ten billion dollars in the artificial intelligence (AI) specialist.

Speaking to Bloomberg, Ark’s head of futures research, Brett Winton, said that progress has been made in the area of ​​foundation models occurred faster than expected. Winton therefore predicts: Companies that rely on this deep learning algorithm could achieve a market capitalization of $16 trillion by 2030. Deep learning is an advanced form of machine learning. Its multi-layered nature means it can handle more complex tasks such as speech recognition or image analysis.

Wood’s best-known fund, the Ark Innovation ETF, achieved cult status during the pandemic amid heavy bets on companies like Tesla. Many companies in which Wood has invested benefited from the pandemic measures. Quarantine and lockdowns led people around the world to celebrate virtual birthdays, hold work meetings digitally, and attend medical appointments online. “It was almost eerie how American high-tech stocks did. Even companies that might only make profits in a few years were hyped up,” says ntv stock market expert Frank Meyer, describing the situation at the time. However, this came to an end with the end of many Corona measures. Stocks that had been promising for Wood plummeted after their pandemic records.

This year, the ETF has continued to lose value, mainly due to the electric car manufacturer’s falling share prices. The financial information and analysis company Morningstar also recently named Ark Invest the largest “asset destroyer” in the fund market. Morningstar finds that over the past decade, no fund family has destroyed more money than Ark Invest’s ETFs. Accordingly, the Ark funds lost shareholders $ 14.3 billion in the ten years to December 31, 2023.

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