famous investor Cathie Wood – Winnipeg Free Press

TORONTO – As Cathie Wood looks at the global technology sector, one innovation stands out, even as its spread creates new opportunities.

Artificial intelligence, the American technology investment expert said, is the “biggest catalyst” for innovation, which she sees in five key areas funded by her firm Ark Invest. These areas include robotics, energy storage, AI itself, blockchain technology and life sciences.

“AI obviously has a role. It’s a separate platform, but it’s also playing a role in the greatest convergence of technologies we’ve ever seen,” she said.

Convergence is part of the reason she said Tesla has the largest position in her investment strategy. The company, she argued, is not only in the autonomous vehicle and robotics space but also committed to experimenting with artificial intelligence.

“We’re getting closer to autonomous transportation, and then people, I think, are going to have a really good understanding of how the physical world and the digital world come together here to create some incredible opportunities,” she said.

Wood’s optimism about AI was on full display during a recent visit to Toronto, where she was hosted by Bank of Montreal, which distributes her funds in Canada.

It’s been a tough few years for Ark and Wood, who earned a reputation as a stock-picking star when her flagship fund surged 150% in 2020 as tech companies like videoconferencing platform Zoom and streaming giant Roku benefited from people spending time at home during COVID-19 lockdowns. The gains Wood delivered through her New York-based Ark Innovation ETF far outpaced the S&P 500’s 16% return.

But Wood’s strategy has seemingly backfired as health measures have been lifted and the tech sector has begun to face the grim reality that forecasts of pandemic growth are unlikely to materialize. Layoffs have followed at major companies including Google, Amazon and Shopify Inc.

Ark Innovation is down almost 68 percent in 2022 alone, according to data compiled by financial markets data firm LSEG Data & Analytics. It has fallen almost 53 percent from the start of 2022 to now.

While Wood is working to get her fund back on top, the world has gone AI-mad, with companies rushing to implement it into their systems and workflows, while governments are wondering how to regulate the potential risks it poses.

According to Wood, artificial intelligence is still in its early stages of development, and he compares its current boom to the emergence of the internet in the 1990s.

“There was a lot of talk about regulations back then,” he recalls.

“If it were regulated, the media industry wouldn’t be what it is today. We wouldn’t have Uber or Airbnb or anything like that.”

When it comes to AI, she said the tech industry is currently focusing on a “lightweight approach.”

U.S. President Joe Biden issued an executive order requiring AI developers to share security test results and other information with the government, while Canada tabled AI-focused legislation in 2022, but it won’t be implemented until 2025.

Canada, meanwhile, has resorted to a voluntary code of conduct that IBM, BlackBerry and dozens of other companies have also signed.

In light of the scrutiny that potential regulators are giving AI, Wood said, “Half the solution is understanding the problem. If a company is implementing AI, it’s usually going to be mission critical at the end of the day.”

He believes Canada is well-positioned to make the transition to AI because of the foundation the country has built around the technology.

To start, she said she was impressed with the AI ​​talent in Canada.

“We see a lot of our American companies opening branches in Canada because there are so many AI specialists here and there is a huge shortage there,” she said.

He credits the tech hub of Waterloo, Ontario, for the country’s wealth of talent, and says Ottawa-based e-commerce software giant Shopify is one of the largest in the country.

Ark invested millions in Shopify stock in March.

Its flagship AI product is Sidekick, a chatbot that the company’s salespeople can use to ask questions about its business operations. The company also offers services that use the technology to compose emails and categorize products.

Wood believes Shopify is a company that is “modern in its thinking” and “growing very rapidly in the AI ​​space.”

Asked what gives her confidence in the brand, even as it battles giant Amazon, Wood said, “the world is becoming social in all ways, including commerce, and Shopify is the biggest example of that.”

This report by The Canadian Press was first published July 12, 2024.

Companies in this article: (TSX:SHOP)