What's Happening?
Investment firms of the ultra-wealthy, such as the family office of Jeff Bezos, are increasingly investing in artificial intelligence (AI) through public equities rather than startups. According to a recent survey by Goldman Sachs, 52% of family offices are exposed to AI via public equities or ETFs, while only a quarter invest directly in AI startups. This trend is partly due to more tempered valuations in public markets compared to private ones. Notably, Bezos Expeditions recently co-led a $405 million funding round for the robotics startup Field AI, and Hillspire, the family office of Google billionaire Eric Schmidt, has backed at least six AI startups in the past six months.
Why It's Important?
The preference for public equities over startups by family offices highlights a cautious approach towards AI investments, driven by concerns over valuation discrepancies between private and public markets. This trend could influence the flow of capital into AI startups, potentially affecting their growth and innovation capabilities. Public companies that leverage AI for productivity and efficiency may benefit from increased investment, while startups might face challenges in securing funding. The shift also reflects a broader confidence in the stability and valuation of public markets, which could impact the strategic decisions of other investors and stakeholders in the AI sector.
