Investors undervaluing the life-changing power of AI

Futurist Cathie Wood, CEO and co-founder of ARK Invest, asserts that many Australians underestimate the transformative potential of artificial intelligence (AI). Wood, who gained prominence during the COVID-19 pandemic with her fund's 153% return, highlighted two key areas where AI will make a significant impact: embodied AI or physical AI, and healthcare.

Embodied AI, which encompasses physical and robotic applications, is projected to generate $10 trillion per year within the next five to 10 years, according to Wood. This includes autonomous transportation, which can be found globally, and humanoid robots that could reach a $25 trillion revenue opportunity annually, both in homes and manufacturing industries. Musk's humanoid Tesla bot may be available to consumers by 2027.

Wood believes the most transformative opportunity for AI lies in healthcare. AI could significantly reduce the time and cost of drug discovery and development, enabling early disease diagnosis through blood tests and potentially curing diseases. CRISPR Therapeutics, a company using gene editing for rare blood diseases such as sickle cell and beta thalassemia, exemplifies this potential. Wood also pointed to ARK's investments in other AI-driven healthcare companies focused on endometriosis and alopecia.

Developing new drugs traditionally takes around 13 years and $2.4 billion, but Wood anticipates AI will shorten this timeframe to five years and $600 million to $700 million (approximately $907 million). She envisions a shift from "sick care" to "real health care and preventative care" through AI advancements. Wood was speaking to Australian Associated Press ahead of opening her venture capital fund to Australian wholesale investors.

The ARK Venture Fund invests in disruptive public and private companies, including OpenAI, Anthropic, and Kalshi. Wood praised Australia for its openness to innovation and plans to meet with potential investors in the country.