- Cathie Wood highlighted the rapid advancement of open-source AI models like DeepSeek, predicting no slowdown in AI investment as enterprises and nations embrace their transformative potential in productivity and research, despite initial market concerns over efficiency impacting chip demand.
- She identified autonomous driving networks, potentially generating $8 to $10 trillion in revenue within a decade, and healthcare innovations like CRISPR cures as major AI-driven opportunities, with Tesla (TSLA) poised to redefine itself through high-margin autonomous platforms.
- Wood foresaw a golden age of tech investing surpassing the Reagan era, driven by deregulation, tax cuts, and five converging innovation platforms, while anticipating a broadening market and a surprising deflationary trend amid a consumer-led recessionary phase.
Cathie Wood, the founder, CEO, and chief investment officer of ARK Investment Management, recently shared her insights on the future of AI and Big Tech during a live onstage interview at the Bloomberg Invest conference. Addressing a recent market sell-off tied to concerns over AI efficiency, she acknowledged the emergence of DeepSeek, a Chinese open-source AI model that surprised the industry with its reported $6 million development cost, though she clarified that its pretraining relied on a substantial 50,000-GPU cluster. Wood emphasized that the model’s open-source nature, alongside others like Meta Platforms’ (META) offerings and the newly released Kung Fu, accelerates competition and innovation, a dynamic she views as beneficial despite initial fears of reduced demand for chips and data centers. She noted that industry leaders like Sam Altman and Jensen Wong praised DeepSeek’s algorithm, reinforcing her belief that open-source models, while trailing closed models in performance, are improving at a steeper rate, driving the AI movement forward.
Wood dismissed suggestions of a slowdown in AI investment, citing a recent conversation with a major large language model provider – bound by a non-disclosure agreement – where nations, educational systems, and enterprises expressed urgency in adopting these transformative technologies. She highlighted the profound impact of AI on productivity and deep research, particularly with new reasoning models, and pointed to tangible shifts in the labor market, such as a sharp decline in U.S. coding jobs as engineers leverage AI to boost efficiency. This productivity gain, she argued, might not yet reflect in macro statistics due to measurement challenges – a phenomenon she recalled from her economics background in the 1980s – but is evident in enterprises opting not to hire additional staff. Wood also observed a shift in the software landscape, with traditional software-as-a-service companies like Salesforce (CRM) experiencing decelerating revenue growth, projecting a drop to 7% from 9% in the next quarter, suggesting that AI-driven innovation may be eroding their dominance as entrepreneurs in garages and R&D centers craft the next breakthroughs.
The conversation turned to two major AI applications Wood sees as game-changers: autonomous driving networks and healthcare. She predicted that robotaxis, or embodied AI, could generate $8 to $10 trillion in global revenue within five to ten years, with Tesla (TSLA) at the forefront due to its proprietary data and technological convergence of robotics, energy storage, and AI. In healthcare, she described an R&D explosion driven by AI, sequencing technologies, and CRISPR gene editing, citing CRISPR Therapeutics’ (CRSP) cures for sickle cell disease and beta-thalassemia as early revenue-generating successes. Wood envisioned a return to a golden age for healthcare, akin to the 1980s Genentech era, where R&D returns could exceed 40%, up from today’s 4% in broad pharma and biotech, fueled by tools like single-cell sequencing paired with AI to unlock biological insights.
On Tesla, a cornerstone of ARK’s portfolio, Wood addressed concerns about Elon Musk’s distractions, including his government involvement, asserting that his role as an inventor adept at navigating technological convergence outweighs any perceived risks. She emphasized Tesla’s competitive edge through deep domain expertise, significant AI investment, and unique data from its vehicles and ventures like Neuralink, which she tied to the healthcare data explosion. “[T]he most prolific data explosion out there is in the health care space. We have 37 trillion cells in our body, and they turn over every quarter,” Wood said. Wood also detailed Tesla’s near-term catalysts – Model Y refreshes, a sub-$30,000 car launching in mid-2025, and autonomous driving rollout in Austin by June – projecting that its shift to a software-as-a-service model with 70-90% gross margins from autonomous platforms will redefine it beyond an EV maker, drawing tech investors back to the stock.
Discussing broader market trends, Wood attributed a post-election rally and subsequent tech sell-off to a shift from fear-driven concentration in the “Mag 7” to a broadening market, spurred by anticipated deregulation under the Trump administration. She argued that reduced regulatory barriers, lower tax rates as a tariff offset, and competitive pressure from China, exemplified by DeepSeek, would create a runway for innovation surpassing the Reagan era’s PC-driven boom. Wood identified five converging innovation platforms – robotics, energy storage, AI, blockchain, and multi-omic sequencing – as the backbone of this era, predicting a bull market dwarfing past cycles. She maintained ARK’s five-year investment horizon, guided by Wright’s Law to track cost declines and unit growth, and noted that recent headwinds like COVID disruptions, rising interest rates, and market concentration have dissipated, with valuations now near market multiples, setting the stage for outsized returns.
Wood concluded with a contrarian macro outlook, suggesting that a slowing velocity of money and consumer uncertainty – evidenced by Walmart’s (WMT) weakening high-end sales and a 30% drop in small business net income over three years – signal a rolling recession’s final leg. She predicted that long bond yields dropping to 4.12% reflect softening real activity, giving the Trump administration and Federal Reserve flexibility to respond, potentially with inflation surprising on the downside. Throughout, Wood’s optimism shone through, framing AI and Big Tech as catalysts for a transformative economic resurgence, grounded in her firm’s rigorous research and long-term vision.
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