In 1995, Ripplewood Holdings was founded by Tim Collins, who has invested in projects over the years alongside influential partners like Blackrock and Nathanial Rothschild, as well as Bank of America. With a now-expanded footprint, Collins still helms the private equity firm as it homes in on leveraged and management buyouts (LBOs and MBOs), growth capital, late stage venture, and other illiquid investments in telco, fintech, and entertainment (to name a few industries).
A key word there, though? “Illiquid.”
Illiquid options typically have very low (or basically zero) open interest. Low volumes of activity, essentially.
That’s what makes the following news more significant:
Ripplewood now seems to be interested in AI, a topics that shot to the moon in popularity over the last year. (i.e. anything but low interest)
But this makes sense, right? AI has become the global talk of the town. According to a MarketsandMarkets report, the AI market size is expected to grow at a CAGR of 36.8% by 2030, which is massive. AI use cases are incredibly diverse; from data analytics and robotics, to the Internet of Things (IoT) and specifically the Industrial Internet of Things (IIoT) manufacturing-wise, even to energy solutions and customer service and myriad other examples.
The long story short? AI is booming and Ripplewood may want in.
To boot, the firm may have set its investing sights on the mothership, so to speak. In this case, Ripplewood might be investing $1 billion in OpenAI, which is known for the tour de force of the AI world that has been ChatGPT.
Though not without its share of controversies, ChatGPT has proven to be extraordinary. It can help users code, create lists, write content, brainstorm ideas; the AI even aced the Uniform Bar Examination by “a significant margin.” That, for many folks, still stands out. The teams at OpenAI have fundamentally turned GPTs into mainstream topics and, since ChatGPT’s debut, it’s felt like everyone has wanted a piece of the AI pie.
And, at the time of this article’s publication, Ripplewood may be serving itself that slice.
While neither Ripplewood nor OpenAI have yet to officially comment on the progress of this potential investment, even general speculations indicate that this could reshape things in both the AI-centric world and in deeper investment spaces as newly stacked-on validation for the groundbreaking technology.
Despite no official comment on an OpenAI investment, however, a spokesperson from Ripplewood was still able to state the following:
“We are pleased to be able to offer our clients innovation based on the latest tech. By using AI, we achieve greater accuracy in forecasting market developments and thus manage our clients’ portfolios more effectively.”
So, Ripplewood is in the dogpile of us already using AI like ChatGPT. Will an investment option go through?
We’ll have to wait with bated breath for official confirmation.
But in the meantime, at least one other thing has become clear: The fusion of AI and finance is, by no means, a fleeting trend. It’s a force that may be able to transform the investment landscape, as we know it.
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