Cathie Wood's ARK Invest has purchased a stake in Elon Musk's AI startup xAI, expanding the firm's already significant bet on artificial intelligence — and giving everyday investors a rare path into one of Silicon Valley's most closely watched private companies.
ARK Venture Fund Bets on xAI
The St. Petersburg, Florida-based asset manager announced the xAI investment in an email to ARK Venture Fund clients, confirming the stake represents approximately 2% of the fund's total holdings. The fund also holds positions in OpenAI and other prominent AI-era companies, including Figure AI and Shield AI.
ARK's exposure to Musk's ventures now spans three companies: xAI, space exploration firm SpaceX, and X Corp. — the social media platform formerly known as Twitter. The firm holds a 12.7% stake in SpaceX, a 1.5% stake in xAI, and a 0.7% stake in X Corp.
Retail Access to Private AI Deals
The ARK Venture Fund was created in September 2022 with a specific mission: to give small investors access to venture-stage companies that are typically closed to all but institutional backers. The fund's minimum investment is just $500.
The fund has deployed nearly $60 million and holds stakes in roughly 50 businesses, most of them pre-IPO. Its management fee of 2.75% is notably high compared with public-market ETFs — a cost investors should weigh carefully against the access it provides.
xAI: Competing Against OpenAI
xAI was founded in March 2023 by Musk with the explicit goal of challenging OpenAI — the company Musk co-founded and later departed. OpenAI has received hundreds of millions of dollars in backing from Microsoft and Alphabet's Google, giving xAI a formidable rival.
The startup recently closed a Series B funding round of $6 billion, pushing its post-money valuation to $24 billion. Investors in that round included Andreessen Horowitz, Sequoia Capital, Valor Equity Partners, and Fidelity Management & Research Company, among others. xAI has stated it intends to build a next-generation version of Grok, its AI chatbot, requiring a purpose-built supercomputer to operate.
Cathie Wood's AI Conviction
Wood has consistently positioned artificial intelligence as the single most disruptive force underpinning ARK's entire innovation thesis. She has called Tesla the biggest AI opportunity in the world, pointing to its autonomous robotaxi program as the clearest near-term expression of that potential. Tesla holds the largest weighting in ARK's flagship ARK Innovation Fund at approximately 11.5%.
Wood has also described OpenAI as sitting "at the cutting edge" of what she calls a "Cambrian explosion" in AI capability. The xAI stake is another expression of that conviction — a bet that multiple players in the AI race can generate outsized returns for investors who can stomach the risk of early-stage, illiquid positions.
