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Family offices still betting on AI startups during deal slowdown
Family offices still betting on AI startups during deal slowdown

CNBC

time08-05-2025

  • Business
  • CNBC

Family offices still betting on AI startups during deal slowdown

Private investment firms of the ultra-rich, rattled by President Donald Trump's tariffs, continued to scale back deal-making in April. Last month, single-family offices made 40 direct investments, down 31% month to month, according to data provided exclusively to CNBC by Fintrx, a private wealth intelligence platform. April's tally also represents a 47% year-over-year decline. However, artificial intelligence-related startups are still garnering attention from family offices, accounting for half of last month's direct deals. In early April, quantitative AI firm SandboxAQ finalized its Series E round of $450 million after upsizing the fundraise twice due to investor demand, CEO Jack Hidary told CNBC. SandboxAQ raised some $300 million last December from investors including a host of billionaires and their family offices, such as venture capitalist Jim Breyer, Salesforce CEO Marc Benioff and Two Sigma co-founder David Siegel. The round was extended this spring, raising an additional $150 million from Bridgewater founder Ray Dalio's family office and a cohort including Google and Nvidia, an existing partner of SandboxAQ. The Palo Alto, California-based firm, which spun off from Alphabet in 2022, is chaired by former Google CEO Eric Schmidt and counts his family office, Hillspire, as a backer. "These are very value-added family offices because they know the world of tech well. They know the world of finance well," Hidary said. "These are experienced executives and entrepreneurs who lend a hand in advising us and are active in doing so." SandboxAQ uses AI and quantum technology to make large-scale predictions and statistical analysis that it markets to a variety of industries, like companies doing drug discovery, cybersecurity, navigation or financial modeling. Its technology analyzes large numerical datasets to make predictive AI models. Hidary, a serial tech entrepreneur, said professionally managed family offices and large institutions have developed a greater appetite in the past six or seven years for deep-tech startups that cater to businesses. "They used to see deep tech as something they didn't touch. It's not their purview. They didn't make their money, you know, doing that," he said. "But now it turns out they understand that actually it's lower risk to invest in deep moat companies." "What they realize, after years of investing in consumer-oriented tech — tech that helps you manage your pet's food or something like that — it sounds great. It builds up a lot of users quickly, but it's easily commoditized," he said. The Inside Wealth newsletter by Robert Frank is your weekly guide to high-net-worth investors and the industries that serve them. Subscribe here to get access today. Family offices are often quicker to make investment decisions than traditional institutional investors, but some want to have deep technical knowledge before they hand over funds, Hidary said. For instance, Breyer met with Hidary four or five times to discuss relevant chapters of two books authored by Hidary. As for Dalio, his investment followed years of discussions with Hidary that initially started in Abu Dhabi, United Arab Emirates, about the impact of AI on the economy. In initial conversations with investors, Hidary says he assesses whether they have the patience for a long horizon. "You don't want a family office that's here to just flip a burger, right? And that would not be a good fit for us," he said. "We're looking to build a global company in the top echelon of tech companies. And I think people are attracted to that ambition. They're attracted to that focus, but it's not for every family office."

AI startup SandboxAQ adds Nvidia, Google as backers, raises additional $150 million
AI startup SandboxAQ adds Nvidia, Google as backers, raises additional $150 million

Reuters

time04-04-2025

  • Business
  • Reuters

AI startup SandboxAQ adds Nvidia, Google as backers, raises additional $150 million

April 4 - SandboxAQ, a startup drawing on quantum computing techniques to develop quantitative artificial intelligence models for enterprises, said it has raised $150 million from new investors including Google, Nvidia (NVDA.O), opens new tab and BNP Paribas ( opens new tab. The investment has increased SandboxAQ's Series E round to $450 million, valuing the startup at $5.75 billion. With this, SandboxAQ's total funding has reached $950 million, with T. Rowe Price Associates and Breyer Capital among backers. Participation of Google and Nvidia signals growing interest from technology giants to gain exposure in quantitative model development and place early bets on potential real-world applications. "We've proven ourselves from the first round in terms of delivering on our promises to a number of customers, and I think strategic investors were attracted to those breakthroughs," SandboxAQ CEO Jack Hidary told Reuters. SandboxAQ, a spin-off from Google-parent Alphabet (GOOGL.O), opens new tab in 2022, has designed Large Quantitative Models (LQMs) to handle extensive numerical datasets, perform complex calculations and conduct statistical analysis. Its models, available through first-party and third-party platforms such as Google Cloud, can potentially be used to assist drug discovery and develop sophisticated financial models. The company is based in Palo Alto and employs about 200 people. It plans to use the new funds to accelerate research and development and expand partnerships with enterprises in areas including biopharmaceuticals, chemicals and energy, Hidary said. Google and Nvidia have been increasing investment in-house and externally in quantum computing, which leverages the principles of quantum mechanics to perform computations beyond the capabilities of traditional computers. Nvidia, known for its chips that powered the generative AI boom, has recently placed emphasis on "physical AI." Nvidia CEO Jensen Huang dialed back skepticism regarding the timeline for practical quantum computing systems. At the chipmaker's "GTC Conference" last month, Huang said advancement in the field is progressing faster than anticipated as Nvidia set up its quantum research lab. Google's work in quantum computing drew attention in December when the firm announced a new generation of quantum chips, overcoming a major challenge in the field. In February, it participated in a $230 million funding round for QuEra Computing.

Is Palantir Technologies (PLTR) the Best AI Stock to Invest in According to Reddit?
Is Palantir Technologies (PLTR) the Best AI Stock to Invest in According to Reddit?

Yahoo

time29-03-2025

  • Business
  • Yahoo

Is Palantir Technologies (PLTR) the Best AI Stock to Invest in According to Reddit?

We recently published a list of the 12 Best AI Stocks to Invest in According to Reddit. In this article, we are going to take a look at where Palantir Technologies Inc. (NASDAQ:PLTR) stands against other AI stocks to invest in according to Reddit. Jensen Huang had previously estimated that practical quantum computing would be 15 to 30 years away, but he recently revised this timeline to 5 to 15 years. This shift reflected the company's growing interest in quantum, which is likely influenced by recent relevant milestones in the tech sector, particularly the MAG7. These advancements focus on error correction and reducing noise in quantum chips, which is crucial for scaling quantum computers effectively. Jack Hidary, SandboxAQ CEO, joined CNBC's 'Power Lunch' on March 20 to discuss his takeaways from these advancements. Hidary emphasized that the future lies in integrating GPUs with quantum computing rather than choosing one over the other. Jack Hidary's perspective on AI focuses on its transformative impact and the shift from consumer-focused applications to business-driven innovations. The conversation on CNBC highlighted that while technologies like flying cars and supersonic air travel have long been discussed without becoming adopted or profitable, AI is rapidly advancing and is poised to deliver tangible results. Over the past two years, consumer AI tools like ChatGPT have dominated attention, which users to generate essays, emails, and summaries with simple prompts. However, Hidary emphasized that the next phase of AI development will center on B2B applications, which he believes will drive profound changes across industries. According to him, B2B AI has the potential to revolutionize sectors such as pharmaceuticals by enabling the development of new medicines and diagnostics. In energy, AI can help optimize hydrocarbon value chains and create higher-value products. In automotive manufacturing, AI is being used not only for autonomous driving but also for lightweight vehicles and improving product designs. Hidary stressed that this shift toward B2B AI represents a significant economic impact, as it addresses 80% of GDP compared to the limited scope of consumer AI. He views this transition as a pivotal moment for AI's integration into critical industries, which promises substantial advancements in technology and economic growth in the coming years. Through these developments, Hidary envisions AI becoming a cornerstone of innovation across multiple domains, reshaping how businesses operate and deliver value. We first sifted through relevant threads to compile a list of the top AI stocks. We then selected the 12 AI stocks that were the most popular among elite hedge funds and that analysts were bullish on. The stocks are ranked in ascending order of the number of hedge funds that have stakes in them, as of Q4 2024. The hedge fund data was sourced from Insider Monkey's database which tracks the moves of over 900 elite money managers. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A software engineer intently typing code into a laptop with multiple screens in an office. Number of Hedge Fund Holders: 64 Palantir Technologies Inc. (NASDAQ:PLTR) specializes in AI-powered software platforms for data analysis and operational decision-making. Its solutions, which include Palantir Gotham, Foundry, and the AI Platform, utilize advanced AI and ML to uncover hidden patterns in complex datasets and enable real-time responses. The company's AI Platform (AIP) facilitates deploying LLMs into enterprise workflows. The company's Q4 2024 revenue hit $828 million, which was up 36% year-over-year. The full-year revenue reached $2.87 billion, which was a 29% improvement. AIP adoption is surging, especially in the US commercial sector. Q4 US commercial revenue grew 64% year-over-year to $214 million. The company's enterprise autonomy focus automates complex processes, like reducing bank back-office tasks from five days to three minutes. On March 18, Jefferies analysts reiterated their Underperform rating for the company with a price target of $60. Despite being impressed by the ROI case studies presented at the company's AI Platform customer event, which showcased the transformative impact of its products, Jefferies maintains its Underperform stance. Palantir Technologies Inc.'s (NASDAQ:PLTR) strong Q3 results, increased revenue guidance which was driven by its AI platform, and potential government partnerships contributed positively to Alger Mid Cap Focus Fund's performance. It stated the following (NASDAQ:PLTR) in its Q4 2024 investor letter: 'Palantir Technologies Inc. (NASDAQ:PLTR) builds advanced platforms for data integration, management, and security, enabling interactive, AI-assisted analysis for its users. Its core offerings include Palantir Gotham, designed for government clients, and Palantir Foundry, tailored for commercial customers. Originally focused on U.S. intelligence agencies, Palantir has expanded into defense contracts with western governments and entered the commercial market in 2016. During the quarter, shares contributed to performance after the company reported better-than-expected fiscal third quarter operating results, along with management raising its full year 2024 revenue guidance. Management noted that the recent launch of its AI platform (AIP), which leverages generative AI to optimize business operations, has driven significant growth and investor interest. Additionally, we believe Palantir could be a key partner for the U.S. government's new Department of Government Efficiency (DOGE), as its AI-driven platforms are ideally suited to help identify inefficiencies, allocate resources effectively, and achieve cost reductions.' Overall, PLTR ranks 2nd on our list of the best AI stocks to invest in according to Reddit. As we acknowledge the growth potential of PLTR, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than PLTR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio

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