Odd Lots Podcast Summary: "Cathie Wood on What Comes Next in AI and Big Tech"

Released: March 11, 2025

In this engaging episode of Bloomberg's Odd Lots, hosts Joe Weisenthal and Tracy Alloway delve deep into the future of Artificial Intelligence (AI) and Big Tech with renowned investor and CEO of ARK Invest, Cathie Wood. Recorded live at the Bloomberg Invest conference in Washington, D.C., the conversation navigates through the transformative landscape of technology, market dynamics, and investment strategies shaping the coming years.

1. Introduction to the Live Event and Cathie Wood's Appearance [01:28 - 03:04]

The episode kicks off with excitement as Tracy and Joe announce their first live show in Washington, D.C., highlighting an upcoming debate on the Jones Act featuring experts from the Transportation Institute and the Cato Institute. They then transition to discussing their recent interview with Cathie Wood at the Bloomberg Invest conference, setting the stage for an in-depth conversation about AI and Big Tech's future.

2. Deep Dive into AI Developments and Market Reactions [04:14 - 09:50]

Deep Seq and Open Source AI Models

Cathie Wood addresses the recent market sell-off triggered by the emergence of Deep Seq R1, a Chinese AI model that raised eyebrows due to its low development cost and impressive capabilities.

"Deep Seq R1... did they really do it on a high-end workstation?... we saw another one came out Kung Fu." [04:28]

Wood highlights the significance of Deep Seq being open-source, contrasting it with closed models like those from Meta Platforms.

"We were impressed by it's open source, anyone can use it." [06:18]

Impact on Technology Investments

Discussing the implications for AI investment, Cathie underscores that the efficiency gains from AI are not yet showing a macroeconomic slowdown. Instead, AI continues to drive significant investments in sectors like data centers and chip manufacturing.

"So here we go. Meta Platforms was really the open source platform large language model. Now we have Deep Seq..." [06:18]

She elaborates on the potential of open-source models to accelerate competition and innovation within the AI landscape.

Productivity and Economic Impact

Responding to questions about AI's macroeconomic impact, Wood acknowledges subtle productivity boosts but notes the challenge in measuring them. She points out that AI tools are enhancing productivity, particularly in engineering, leading to reduced hiring needs.

"Enterprises are seeing a difference... engineers just become more and more productive." [09:10]

Wood remains optimistic about AI's transformative power, emphasizing its role in driving future research and development.

3. Investment Strategy and Open Source Philosophy [08:22 - 09:50]

Embracing Open Source in Investments

Cathie Wood discusses ARK Invest's focus on open-source AI models, arguing that they foster competition and speed up technological advancements.

"Open source is helping along the competition, helping the movement along, helping it go faster." [08:22]

She contrasts this with OpenAI’s closed approach, suggesting that open-source models present a more collaborative and rapidly evolving ecosystem.

Long-Term View on AI and Healthcare

Wood articulates ARK Invest's long-term strategy, targeting five-year horizons for transformational technologies. She emphasizes AI's role in revolutionizing sectors like healthcare and autonomous driving, predicting significant revenue growth from innovations like robo-taxis and CRISPR gene editing.

"We think the AI revolution... driving $8 to $10 trillion in revenue globally in the next 5 to 10 years." [09:50]

"We're going to return to the golden age for healthcare." [09:50]

4. Tesla, Elon Musk, and Autonomous Driving [16:02 - 22:41]

Tesla’s Strategic Position in AI

Cathie Wood addresses concerns about Elon Musk's focus across multiple ventures, asserting that his expertise and innovative drive keep Tesla at the forefront of technological advancements.

"Elon Musk is probably the inventor of our age... taking AI seriously and they're investing in it." [16:24]

Autonomous Driving and SaaS Model

Wood highlights Tesla’s shift towards an autonomous driving platform, which she believes will transform the company's revenue structure from low-margin EV sales to high-margin software as a service (SaaS).

"Its autonomous platform will be in the 70 to 90% gross margins range, whereas their EV gross margins are in the mid-teens." [21:00]

She contrasts Tesla's economic model with competitors like Waymo, citing Tesla's scalability and economic viability.

"Waymo's car is uneconomic... it's going to be very difficult for them to scale without losing a lot of money." [22:08]

Wood reaffirms her confidence in Tesla's leadership position in autonomous driving within the United States.

5. Market Dynamics, Regulation, and Future Outlook [23:07 - 37:28]

Tech Market Volatility and Deregulation

Cathie Wood analyzes the recent volatility in tech stocks, attributing the sell-off to fears surrounding regulatory environments and strategic shifts in the market post-election. She anticipates deregulation initiatives under the current administration, predicting a resurgence similar to the Reagan era but on a larger scale due to multiple converging technologies.

"Deregulation is critical to this administration's mandate... we're going to recreate something like the Reagan revolution." [23:07]

AI’s Multidimensional Impact Across Sectors

She elaborates on five key innovation platforms—robotics, energy storage, AI, blockchain technology, and multi-omic sequencing—explaining how their convergence will drive unprecedented growth and technological breakthroughs.

"Five innovation platforms now, 14 different technologies... they're going to be feeding one another." [26:00]

Market Concentration and Broader Market Growth

Wood discusses the dangers of market concentration observed in the recent rally towards the MAG6 (Microsoft, Apple, Amazon, Google, Meta, and Tesla), predicting that diversification and broader market participation will follow, leading to sustained bull markets.

"After a major concentration... either a bear market or a bull market that broadens out." [27:00]

Valuation and Interest Rates

She touches upon valuation metrics, noting that ARK’s portfolio is approaching favorable valuations relative to the S&P 500. Wood also addresses the impact of interest rates, asserting that the current environment of high rates is an unusual headwind that ARK has successfully navigated, and anticipates stabilization.

"The valuation headwind is gone. ... inflation is going to surprise shockingly on the low side of expectations." [37:00]

6. Concluding Insights and Final Thoughts [37:28 - 37:59]

In wrapping up, Cathie Wood reiterates her optimism about AI and transformative technologies reshaping economies and industries. She emphasizes ARK Invest's commitment to long-term investments in these sectors, anticipating substantial returns as these technologies mature and become integral to various aspects of life and business.

"We are on the other side of that. ... long-term bets on transformational technology." [30:30]

The hosts thank Cathie Wood for her valuable insights, underscoring the significance of AI and Big Tech in future investment landscapes.

Notable Quotes with Attributions

• Cathie Wood [04:28]: "Meta Platforms was really the open source platform large language model. Now we have Deep Seq and I think yesterday another one came out Kung Fu."

• Cathie Wood [08:22]: "Open source is helping along the competition, helping the movement along, helping it go faster."

• Cathie Wood [09:50]: "We think the AI revolution... driving $8 to $10 trillion in revenue globally in the next 5 to 10 years."

• Cathie Wood [16:24]: "Elon Musk is probably the inventor of our age... taking AI seriously and they're investing in it."

• Cathie Wood [22:08]: "Waymo's car is uneconomic... it's going to be very difficult for them to scale without losing a lot of money."

• Cathie Wood [23:07]: "Deregulation is critical to this administration's mandate... we're going to recreate something like the Reagan revolution."

• Cathie Wood [37:28]: "We are on the other side of that. ... long-term bets on transformational technology."

Conclusion

This episode of Odd Lots offers a comprehensive exploration of the current and future states of AI and Big Tech, guided by Cathie Wood's expert analysis. From the disruptive potential of open-source AI models like Deep Seq to the strategic maneuvers of giants like Tesla, the discussion underscores a dynamic interplay between innovation, regulation, and market forces. Investors and technology enthusiasts alike will find valuable insights into the trends that are poised to shape the global economy in the years to come.

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