ARK Invest, the investment management firm founded and led by Cathie Wood, has announced the acquisition of a stake in Elon Musk’s artificial intelligence (AI) startup, xAI.
On May 28, ARK disclosed this investment to its clients via email. ARK Chief Futurist Brett Winton stated that the stake represents about 2% of the fund’s holdings, according to Bloomberg.
Winton remarked, “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.”
Earlier, on May 10, X introduced AI-curated audiences, enabling advertisers to define target groups while X’s AI creates relevant user pools.
This acquisition is part of ARK Invest’s broader strategy in AI. Last month, ARK revealed that 4% of its holdings are in OpenAI, the creator of ChatGPT, and 5% are in Anthropic, the developer of the Claude AI model.
Winton anticipates AI foundation models will be valued at “multiple trillions of dollars by the end of this decade.”
During the COVID-19 pandemic in 2021, Wood garnered attention for her bullish investments in Tesla, another company associated with Musk.
xAI, Musk’s latest venture, launched in March 2023, aims to compete with AI giants like OpenAI, Google, and Microsoft.
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On May 26, xAI announced it had raised $6 billion in a Series B funding round, attracting major investors such as Andreessen Horowitz, Sequoia Capital, Fidelity Management & Research Company, and Prince Alwaleed bin Talal and Kingdom Holding, among others.
This funding round increased xAI’s valuation to about $24 billion, a significant milestone for the relatively young startup. Musk has also hinted at plans to launch a new data center by fall 2025.
This project, referred to as the “Gigafactory of Compute,” is intended for training and developing the next generation of the company’s Grok AI system.
Musk has been vocal about his views on AI and its potential impact on the future.
At the VivaTech Paris 2024 conference, Musk expressed concerns that current AI models are not “maximally truth-seeking” and instead “pandering to political correctness.”
He also predicted that AI will soon “do everything better than you” and eventually render employment obsolete.
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