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ARK Invest has been making AI-related moves, and xAI’s is the latest in that regard.
Cathie Wood’s ARK Invest has made a huge statement that appears to confirm its bullish stance on artificial intelligence (AI). This follows after the firm committed $60 million to Elon Musk’s AI startup xAI.
The investment, though strategic for ARK Invest, is part of a broader trend of increasing capital flow into AI technologies. This reflects a growing confidence in the future of AI and its transformative potential.
It might be worth mentioning that ARK Invest is well known for its forward-thinking investment strategies. So, its May 28 announcement about acquiring a stake in xAI doesn’t exactly come as a surprise.
According to ARK’s Chief Futurist Brett Winton, the investment in xAI accounts for approximately 2% of ARK’s total fund holdings. Winton also noted the unique advantages that xAI possesses, which makes the investment a worthy effort. His part statement reads:
“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.”
ARK Invest Sees Huge Potential in AI
As earlier mentioned, ARK Invest has been making AI-related moves, and xAI’s is the latest in that regard. Recently, it disclosed that a sizable 4% of its total holdings are invested in OpenAI, the popular creator of ChatGPT. Furthermore, the firm has 5% of its holdings in Anthropic, the developers of the Claude AI model.
However, the reason why the company is keen on embracing AI technologies might have been explained by Winton in his latest comments. According to Winton, AI foundation models hold serious potential for having long-term value. Hence, the prediction that they will be worth “multiple trillions of dollars by the end of this decade”.
Elon Musk’s xAI, launched in March 2023, is the latest project on the competitive AI scene. In a bid to compete with established giants like OpenAI, Google, and Microsoft, the startup will be hoping to leverage its close integration with X (formerly known as Twitter). This means that it can use the introduction of AI-curated audiences to its advantage in the AI market while also enabling advertisers to define target demographics more precisely.
More Plans for xAI
Meanwhile, Musk has ambitious plans for xAI. He has hinted at the development of a new data centre, which is set to launch by fall 2025. Dubbed the “Gigafactory of Compute”, this facility will focus on training and advancing the next generation of the company’s Grok AI system, further solidifying xAI’s position in the AI market.
As Coinspeaker reported in an earlier publication, xAI recently completed a $6 billion raise in a Series B funding round. The round saw investment from notable names such as Andreessen Horowitz, Sequoia Capital, and Fidelity Management & Research Company, among others.
That particular funding round was also enough to bring xAI’s valuation to approximately $24 billion, a remarkable feat, considering that the startup is just over a year old.
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