BIG BET: Cathie Wood goes ALL IN on Elon Musk

[00:00:02]Yeah, this is a kind kind of a one one center generation or build out. We are going to see big productivity growth and really that's how you increase national wealth is through productivity growth. This administration supports open source models, but what we do not support is IP threat IP theft and if we see especially that overseas models are stealing from our great companies, we have the ability to sanction them because of this theft.

[00:00:35]>> And that was Treasury Secretary Scott Bassett with me here yesterday on the AI boom and national security threats as top American AI executives are sounding the alarm on Chinese AI models. It's AI week here on Morning with Maria. All week we are looking at the most important companies and people behind the massive AI infrastructure and spending boom including investing around it. I have one of the top AI investors with me right now. Her company manages more than $30 billion in assets an early investor in SpaceX. Number one investment is Tesla. But she was an investor in SpaceX before the blockbuster IPO and joining me now is the woman herself Ark Invest CEO Cathie Wood. Cathie, great to see you. Thank you so much for being here. What's your take on this race with China? I know you have said that AI represents an enormous investment opportunity, but we are worried now about these new models coming out of China. China's moonshot in talks on a pre-IPO at a $50 evaluation.

[00:01:32]How do you assess this situation?

[00:01:35]>> Well, we we think that this is a good thing for America. The competition we're at our best when we're competing and we've taken a close look at both Deep Seek and Kimmy K the newest one and what what we're finding is it sounds like they are much less expensive in terms of models, Uh but they're also much less efficient. Uh so what China is doing is throwing power at uh at the AI equation and its models just are not as efficient as ours. Uh we are power constrained.

[00:02:11]>> Yeah, I want to get your take on investing in this space because you've got so many different pockets of opportunity, whether it be AI and models or semiconductors or power. Um SpaceX is one of your top holdings and you've been increasing your exposure to SpaceX.

[00:02:27]You've added uh more than $80 million since the IPO. SpaceX is below the IPO price now at 123 and change. The company is set to unlock another $116 billion in shares next month after the lifting of the IPO restrictions. What's your take on SpaceX since it is down 33% in the last month, Cathie?

[00:02:48]>> Yes, from its peak it is, but of course not from the IPO price. Um we think this could become the most important company in uh in history uh and and and I mean in global history because we're talking about not only uh really exploring a new world, the universe, uh in terms of uh its launch capabilities and helping others to do so as well, but also a global communications network. Uh really uh think tel- telecom that's been a very local business. In fact, the way to break into countries historically was by the telco.

[00:03:26]No longer. This is a global business and uh and SpaceX uh uh is the first mover with 75% of the satellites out there. And then, beyond that, we have uh the uh global data centers or orbital data centers. Uh so they will be the most economic and will allow uh Elon and team uh the opportunity to develop, we think, some of the most sophisticated frontier models in the world at the lowest cost.

[00:03:57]So, huge opportunities uh and in the meantime, uh you know, on Earth, SpaceX is renting out its data centers to Anthropic and Google and others. So, it's it's an amazing story.

[00:04:13]>> Yeah, it's interesting because you just mentioned uh the telecom industry. We're going to be talking with the CEO of AT&T shortly. And when you compare AT&T to a SpaceX, both connect people, but they've got fundamentally different technologies and and economics on the way to do it.

[00:04:28]How would you compare SpaceX to the telcos and and AT&T in particular?

[00:04:34]>> Well, I think in the short term uh that that SpaceX might be making deals with telcos around the world, but longer term, it does expect to go direct to consumer or direct to business.

[00:04:49]Uh so, and it will do so at a much lower cost as it scales because it'll be global in nature. And the secret to scaling technologies is falling costs as units uh increase. So, you know, it's interesting. In space, SpaceX has a a first mover advantage. It's going to be very difficult. In fact, it has a 10-year lead. And the key key key key has been reusable rockets. 10 years ago, it landed its first rocket uh and then sent it up uh into orbit. No other company has been able to do that successfully, even Blue Origin.

[00:05:27]Uh in late last year, uh did land, so congratulations. And we're thrilled. We won we want this race and we want many players, uh but it did not relaunch into the orbit it wanted successfully. It did relaunch, though.

[00:05:42]>> Mm. Kathy, so many companies have been integrating AI across their internal and customer-facing operations. We spoke with the CEO of BNY, Robin Vince, as he is changing how his bank operates with AI. Watch this.

[00:05:58]>> It's a super powerful technology, but it is about adoption. And And the question is key because the technology's already at such a level that all of us in our individual lives and our in our corporations, uh the struggle is how do you get it more embedded so that it's more part of every piece of workflow that we have inside a company. So, we built our own platform. It's called Eliza, back to our history, Alexander Hamilton's spouse. Um we've got agent builders in our company. We've trained everybody. We're doing 10, 20, 30, 40 hours of training. We're really helping people be able to adopt AI. We've got over 200 solutions in production, and we really believe that AI can be a super powerful the company and a super powerful the people in the company.

[00:06:43]>> So, Cathie, I want to get your take on AI and how you're investing around it.

[00:06:47]You've said that you think uh AI is going to be uh the biggest investment opportunity of our lifetime. What industries do you think AI will disrupt first, and how are you investing around this theme of artificial intelligence?

[00:07:05]>> Yes, well, I think uh the first the first thing that uh that companies are doing is investing in productivity coming out of uh AI. So, this from an active equity management point of view is very important. As we're talking to companies, we want to understand how they are deploying AI. Arc, for example, uh we're using Palantir. We're ironically bringing in more uh talent, uh very young talent that is AI native.

[00:07:36]Uh And I do agree that this is a mindset shift. So, uh I I think it's very important to uh for every company to take this seriously. But, from a higher-level, bigger-picture, uh disruption, yes. If any uh company clings to the old ways of doing things, I think health care, and I know you featured health care and AI on on your show, but we think that health care is the most profound application of AI from a drug discovery point of view, collapsing the time and costs, from uh uh uh diagnostic point of view, identifying and diagnosing diseases, maybe even before uh they we see any symptoms, uh as as sequencing technologies and AI come together, and then adding in CRISPR gene editing, uh we are seeing cures for disease. So, the convergence of those three technologies is going to transform health care.

[00:08:33]>> Yeah, and and you know, we've been doing a deep dive on defense as well. I mean, one other industry that's seeing a complete fundamental change is defense technology. Uh how we outpace China, the White House considering further restrictions, uh reportedly, on companies using AI models from Beijing.

[00:08:51]We had the CEO of Saronic on this week, Dino Mavroukas, on the defense race.

[00:08:55]Here's what he said.

[00:08:58]>> We don't have to beat China in the traditional sense of let's go outbuild what they're building. We are going to beat China in the new way. We're going to outproduce China by building autonomous vessels, by building the future of the maritime industry, by building software-defined platforms, by building new shipyards that are more efficient than the shipyards that the Chinese have, and deterring them with asymmetric capabilities, ships that can be built cheaper and at higher rates, and controlled by software. We don't need to go and build 1,200-ft cargo containers. We certainly can, and we will be able to, uh, Port Alpha, but that's not necessarily the deterrence that our military is looking for, and that's what we're going to deliver.

[00:09:44]>> Kathy, where do you see the biggest opportunities in defense tech right now, and are you worried about all of this money being plowed into AI as people question when we're going to see the return on investment?

[00:09:57]>> Uh, I Well, of course, the question there is the government is funding a lot of this, and what will be, you know, at the end of the day, uh, the real profitability here. Uh, this, uh, this administration is serious, uh, that we get back into the game, and I agree completely. And it, it, actually, it's a bigger point that the CEO, uh, from, uh, Saronic is making. Uh, this is true of all manufacturing.

[00:10:21]Uh, so, you know, we're going to do what China did to us with telecom, and, uh, with telecom in particular. They went directly to wireless. They didn't need to build out their landlines. Uh, and they did the same thing with digital wallets. They went to directly to WeChat Pay, not to, uh, bricks-and-mortar, uh, banking system. So, they leapfrogged us.

[00:10:46]Meanwhile, they took our, uh, manufacturing sector. Now, we're going to do to them, uh, what they did to us in those two industries. We are moving into the new world. We have, uh, you know, a lot of green space, and we're going, we are bringing manufacturing back, and I think we will leapfrog China because it actually has old technology now, uh, built over the last 25 years.

[00:11:12]>> Kathy, what's your favorite stock right now, uh, related to AI?

[00:11:16]>> Well, it has to be Tesla, uh, and which ultimately will be SpaceX, I think, uh, when they combine.

[00:11:23]Uh, it's the most powerful, you have the, the robo-taxi opportunity, uh, the orbital data center opportunity, uh, and, uh, I think many people are underestimating not only optimist, which is of course an AR I play, but what used to be XAI now SpaceXAI and that is the frontier model.

[00:11:45]So there are lots of opportunities and they're multi-trillion dollar opportunities. That's what I think is surprising people to see Anthropic's annualized run rate go from 9 billion to 47 billion in 6 months.

[00:12:02]>> That's amazing.

[00:12:03]>> 6 months. It's really wild.

[00:12:05]>> That really is and I know Tesla's your number one holding. Kathy, it's always a pleasure. Thanks so much.

[00:12:10]>> Thank you, Maria. Thank you very much.

[00:12:12]>> joining us