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Future of Capital Allocation

Your weekly newsletter on the fast-evolving world of investing
The week's developments in investing & technology, explained | 02.05.24

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Elon Musk isn’t one to sit idly by as all other major tech players continue to release AI model after AI model. His 10-month-old venture, xAI, is reportedly closing in on a $6 Billion fundraising deal with potential investors including Sequoia Capital, Future Ventures and Valor Equity Partners. But with the AI arms race becoming increasingly competitive, can Musk’s charm woo investors' hearts as well as their wallets? 


Also in focus today, AI expert and investor Roger Spitz recently shared with us his top 5 Strategies to Activate Your Agency and Stay Relevant in the Age of AI. Inspired by his insights, we sat down to ask him 6 questions on how businesses can leverage this knowledge to stay ahead of the curve.


Elsewhere, we cover what CVC Capital’s long-awaited IPO says about a market rebound, why Goldman Sachs sees a turnaround on the horizon for PE deals and new OpenAI startup fund deal.


Read these stories and more below — in our CogX must reads.


— Charlie and the Research & Intelligence Team


Navigating Disruption and Innovation: An Exclusive Interview with Roger Spitz


‘My focus on AI is not about trends or the latest technology fads. I try to prioritise signals over noise, investigating the fundamentals that propel change.’


Roger Spitz is the bestselling author of Disrupt With Impact: Achieve Business Success in an Unpredictable World and the four-volume collection The Definitive Guide to Thriving on Disruption. President of Techistential (Strategic Foresight), and founder of Disruptive Futures Institute (Think Tank) in San Francisco, Spitz is a leading expert and investor in Artificial Intelligence, and is known for coining the term “Techistentialism”. He publishes extensively on the future of strategic decision-making and AI. Spitz is also a partner of Vektor Partners (Palo Alto, London), a VC fund investing in the future of mobility. As former Global Head of Technology M&A with BNP Paribas, Spitz advised on over 50 transactions with deal value of $25bn. 


In this exclusive interview, Spitz sheds light on the core drivers of change, the overlooked risks facing businesses today, and the philosophical underpinnings essential for anticipating and mitigating future disruptions. From his pioneering concept of ‘Techistentialism’ to the imperative of adopting adaptive strategies, Spitz offers pragmatic frameworks and thought-provoking perspectives to steer us towards a more resilient and inclusive technological future.


With your background in tech and investment, what drew you to focus on AI?

My focus on AI is not about trends or the latest technology fads. I try to prioritise signals over noise, investigating the fundamentals that propel change. I view disruption systemically, transcending the passing technological hypes that emanate from Silicon Valley. Amongst others, AI is undeniably a key underlying driver of change, hence my interest.


How are businesses failing to acknowledge AI’s ‘Complex Five’?

Our "Complex Five" — Gray Rhino, Black Jellyfish, Black Elephants, Black Swan, and the Butterfly Effect — represent critical, high-impact scenarios often overlooked by businesses. 

  • Gray Rhinos are extremely likely, visible and high-impact threats that businesses frequently ignore, like the rapid spread of AI disinformation.

  • Black Jellyfish symbolise obscure, low-probability but impactful events, that sart off seeming normal but escalate into complex crises, such as the amplification of societal biases by AI technologies.

  • Black Elephants are apparent, probable threats that are commonly disregarded, akin to ignored cybersecurity risks in critical infrastructures.

  • Black Swans are unpredictable, rare, yet crucial events that can lead to severe consequences, challenging us to prepare for what we cannot foresee.

  • The Butterfly Effect brings these all together, illustrating how minor changes can trigger major, unforeseen impacts.


Are humans already beginning to act like ‘idle machines’ as a result of increasing reliance on AI? 


Algorithms are already making decisions that determine insurance costs, mortgages, creditworthiness, employee performances, recruitment, and recidivism predictions. Over the next decades, this scope could evolve even further, with algorithms making life-altering decisions on our behalf involving brain-computer interfaces, education, healthcare interventions, and driving. All affect our privacy, responsibility, agency, and nearly every other aspect of our lives, including what it means to be human. Trustworthiness is paramount when AI is operating independently of human control - even with “benevolent” AI. 


‘As algorithms become the most important decision-makers in our lives, the question is not only whether we can trust AI, but whether we can trust that we understand AI well enough.’


… want to keep reading? Check out the full interview here on the CogX Blog.


Share your expertise! Want to be a guest contributor in our next issue? drop us a line at:

The investment ecosystem

💰 What CVC Capital’s long-awaited IPO says about a market rebound. Euronext boss Stéphane Boujnah believes that the long-awaited trading debut of private equity group CVC Capital Partners is a positive sign for Europe's IPO market recovery. He said it marked a strong signal that Europe's IPO market is "back on track."

📈 Goldman Sachs Sees Rebound for Private Equity Deals: After a dismal 2023 with private equity M&A hitting a 10-year low, a whitepaper from Goldman Sachs Global Banking & Markets predicts a turnaround is on the horizon.


🌱 European cleantech startups are seeing a surge in VC funding, with Q1 2024 reaching the highest quarterly deal value since 2021. Investments have already surpassed the halfway mark for all of 2023, with a strong possibility of shattering the annual record.


Chart of the week

The rise of robots isn't just science fiction anymore. Fueled by ongoing research and development (R&D) efforts, humanoid robots are set to rapidly integrate themselves into our daily lives.


How AI is transforming investing 


🦾 Sequoia Capital joins the AI development race. The famed VC firm is set to invest in Elon Musk's ambitious xAI startup, which is reportedly closing in on a $6 billion funding round. Other investors like Future Ventures, Valor Equity Partners and Gigafund are also expected to join the deal.


💸 The OpenAI Startup Fund, which invests in early-stage AI companies, has quietly raised $15 million from two undisclosed investors. Bringing their total funding to $25 million, after a previous $10 million tranche in February. 

🕵🏻 The AI Hunt for Crypto Money Laundering. Leveraging AI’s superhuman ability to analyse vast troves of data, blockchain analysis firm Elliptic, MIT, and IBM have developed a new AI detection model that aims to spot the “shape” of bitcoin money.


📉 Meta AI spending plans cause share price slump. The tech giant announced it had been updating its ad-buying products and social media platforms with AI tools, leading to an increase in projected spendings of over 12%. Despite the company’s strong earning figures, the stock went down more than 15% in after-hours trading in New York.

💼 Automation powered by AI is expected to replace nearly a quarter of jobs across all industries, according to research by Goldman Sachs. Companies are likely to adapt by relying more on temporary workers and online platforms offering AI-powered services.


🚀 The 15 must-watch UK Startups, according to investors.  From sustainable housing to e-commerce optimisation and Healthcare AI, VCs share their picks for the most innovative startups across the UK tech scene.

🛡️  Cybersecurity firm Darktrace goes private. The UK-based cybersecurity company is being taken private by US investment firm Thoma Bravo for £4.3 billion, just three years after its initial public offering in London.




Noteworthy deals

  • MARK-PILOT, a Germany-based spare parts pricing software company has raised $43m in a series A funding round led by Insight Partners.


  • Ansa, a San Francisco-based startup helping merchants develop and offer branded virtual wallets, has raised a $14m series A round of funding led by Renegade Partners.


  • BforeAI, a France-based startup using AI to predict cyber attacks has raised $15m in series A funding led by SYN Ventures.


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Disclaimer: This content is for informational and educational purposes only. It does not constitute financial, investment, legal or tax advice.

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