Yahoo Finance

The artificial intelligence boom just getting started and Ark Invest CEO Kathy Wood is betting big. Yahoo Finances, Josh Lipton is here now with a closer look at the opportunity. Josh.

Brad, there is no bigger trend for investors than the mega trend of AI and a company we all associate with that trend has been making headlines. Open AI, company behind chat GPT, recently announced that it raised $6.6 billion in new funding. Investors valuing the startup at an eye-popping $157 billion. Now just to put that into context here, that is similar, that's a similar market capitalization to publicly traded companies like Goldman Sachs. This round was reportedly led by venture capital firm Thrive Capital. Other investors included Microsoft and new investors such as Softbank, Nvidia and Kathy Woods, Ark Investment Management. Yahoo Finance recently did speak with Kathy Wood and asked her why she's so bullish on this startup. In part, she talked with us about how revenue has been growing very strongly, her confidence that the company will be able to charge a lot more in the in the future for its technology as it develops, and her trust in OpenAI chief executive Sam Altman and his management team, despite a number of recent executive departures.

We always look at who they are bringing in and who they are retaining as talent. Uh and we think one of uh Mira, the CTO who just left, I think she has built a very solid organization. And we love the fact that Sarah Friar has uh come in as CFO. I followed Sarah since her Goldman Sachs days, uh through Salesforce and uh Block. And uh she's an incredible leader. So uh to attract her spoke volumes to us.

So, how does business look for this young company right now? Well, it is growing at a very impressive clip. We know that with 250 million weekly active users, 11 million paying subscribers. It is expected to generate revenue this year of $3.7 billion. That's according to the Wall Street Journal, but it is still far from profitable, expecting to lose around 5 billion. Its investors clearly willing to give that a pass for now as it grows, grows, grows. Looking ahead, per reports, Open AI estimates that its revenue will surge to 11.6 billion in 2025, Brad.

I mean, the likelihood that this company is going to need to go public anytime soon with funding infusion like this. What do you think?

I think you could make the case that though an IPO, and I I don't know time frames, you think though it has to happen at some point, Brad, because they do, I mean, to develop and operate AI models costs a ton of money. You have to have big AI brains working at the company, right? That's a lot of money. And there's no way a trustbuster in Washington is ever letting a big tech company buy this one.

True. Well, the exposure right now is investing into the companies that have investments into OpenAI for sure. Josh, great breakdown as always. Appreciate it.

Sure.