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Thursday, 14 March 2024

Investors Eager to Tap into AI Boom: A Conversation with Ben Miller of Fundrise

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Investors Eager to Tap into AI Boom: A Conversation with Ben Miller of Fundrise

Investors are increasingly eyeing the burgeoning Artificial Intelligence (AI) sector, seeking to capitalize on its growth potential before AI companies go public. Ben Miller, representing Fundrise, an online investment platform primarily focused on private real estate, discussed the recent trend of investors turning their attention toward private AI companies like Anthropic and Canva.

“Last year, we observed a significant shift among investors, moving away from high-yield checking accounts and fixed income towards equity and AI,” remarked Miller. “Survey data indicates a strong appetite for AI investments, reflecting a desire to ride the rising tide of AI innovation.”

In response to this demand, Fundrise launched an Innovation Fund aimed at democratizing access to both private and public markets. The fund particularly targets retail investors who previously lacked opportunities to invest in venture capital. Miller emphasized the importance of providing ordinary investors access to mature pre-IPO companies, echoing similar moves by investment giants like Goldman Sachs in the past.

Addressing concerns about the speculative nature of AI investments, Miller underscored the robustness of Fundrise’s diligence process. He highlighted the company’s registration with the Securities and Exchange Commission (SEC) and its team’s expertise in evaluating late-stage, mature companies with substantial revenue streams. Miller emphasized that while there are risks inherent in any investment, focusing on established companies mitigates some of the uncertainty associated with early-stage ventures.

Commenting on the comparison between the AI boom and the dot-com era, Miller acknowledged the potential for both booms and bubbles. However, he pointed to research suggesting that AI could become a $15 trillion market by the early 2030s, presenting significant wealth-creation opportunities. Miller emphasized the importance of distributing this wealth fairly, advocating for diversified fund portfolios that balance established, low-risk investments with more speculative ventures.

Regarding fees, Miller highlighted Fundrise’s commitment to a low-fee model, in line with the ethos of firms like Vanguard. By charging a management fee of 1.85% without carried interest, Fundrise aims to reduce costs for investors and democratize access to AI and other innovative sectors.

As the AI landscape continues to evolve, platforms like Fundrise are poised to play a pivotal role in democratizing access to this transformative technology, empowering retail investors to participate in its growth story.