D1’s Dan Sundheim and Surgocap’s Mala Gaonkar spoke about investing in AI at a conference in Chicago. Sundheim said private companies will not be leading this technological change anytime soon. Gaonkar said the most promising industry for AI advances in the near term is medical technology.
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The best way to invest in the world’s hottest trends is not through a seed round or a full-fledged private company, said Dan Sundheim, founder of D1 Capital Partners. This is despite billions of dollars pouring into artificial intelligence startups in the last quarter alone.
Mr. Sundheim has a portfolio of billions of dollars invested in both public and private companies and believes the best way to capitalize on the AI craze is with public companies. Speaking at the Invest for Kids conference in Chicago on Tuesday, he said all companies are interested in putting money into AI because it will be felt across all sectors, unlike other major technological advances. He said there is.
Large publicly traded companies have the most resources to deploy AI across their operations, according to a summary of his comments seen by Business Insider. In other words, scale is better than agility in the AI space.
He said companies that are putting money and talent into AI projects are doing so without expecting a short-term return on investment. The infrastructure required for these projects means companies are looking at ROI 10 years from now, rather than a quarter from now, he said.
Sundheim spoke on a panel with Mala Gaonkar, a former Lone Pine executive who launched SurgoCap Partners in early 2023. From her perspective, AI will impact industries on different timelines, so over the next three to five years we will see which areas will see immediate benefits and which will take time.
Gaonkar said medical technologies such as diagnostic imaging should benefit from advances in AI sooner than other fields.
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Sundheim also said the need for AI infrastructure will create investment opportunities for companies that supply equipment to upgrade the power grid.
Both companies had strong public market investments.
With assets ballooning to more than $3 billion, Gaonkar’s fund is up more than 25% this year, BI previously reported. Sandheim’s D1 manages about $26 billion, according to regulatory filings, and a recent report from Institutional Investors shows that venture investing is down 2.6% year-to-date in 2024. Regardless, the public register is up more than 34%.
Both funds are part of Julian Roberston’s Tiger Management’s broader Tiger Cub network, known for its focus on growth stocks, particularly in the tech sector. Sandheim, who served as CIO of Viking Global before launching D1 in 2018, joined funds such as Tiger Global and Kochu in 2020 and 2021 to aggressively raise capital for private companies. went. The firm has made 228 investments in private companies since six years ago, according to PitchBook.
For the past three years, Sundheim’s private portfolio has been a drag on his overall returns, but even as he now looks to large publicly traded companies for exposure to AI, he said Tuesday: He said the most exciting company in the world is Elon Musk’s SpaceX, a privately held company.
According to II’s report, D1 holds approximately $2.5 billion worth of stock in the company.
Both companies declined to comment.
