Coatue Management, a technology-focused hedge fund with about $50 billion in assets, is raising $1 billion to invest in AI startups. According to Bloomberg, this new fund will come from Coatue’s flagship investors, including institutional investors and high-net-worth individuals from brokerage firms like Raymond James and Associates.
Investment slowdown and current strategy
Following the pandemic’s tech boom, Coatue’s investments in startups slowed significantly. According to PitchBook data, the firm invested in only 30 companies in 2023, compared to 170 in 2021 and 81 in 2022. As of 2024, Coatue appears to be aiming for a modest rebound, with 29 investments in AI-focused companies.
Focus on AI and emerging technologies
Coatue sees AI as a transformative technology shaping multiple sectors, from data centers to consumer applications. With over 50 companies already in its AI portfolio, the firm’s founder Philippe Laffont has stated that AI represents a “new revolution” in technology due to the rapid pace of adoption. For example, over half of the trending repositories on GitHub relate to AI, and more than 8,000 AI applications were launched in the last year alone.
Notable AI investments
Coatue has invested in several emerging AI companies, including:
- Glean: A platform that helps businesses organise and access information quickly.
- Scale AI: Known for its data labelling solutions, Scale AI supports companies in training machine learning models.
- Stability AI: An open-source generative AI company based in London.
- CoreWeave: A provider of cloud infrastructure for AI processing.
- Verse: Focused on using generative AI for clean energy advancements.
- Skild AI: This company builds a general-purpose AI robot with the potential for widespread applications.
Humanoid robots: A new investment area
Coatue has recently shown interest in humanoid robots. Laffont believes these robots, powered by advanced AI, could be game-changing across various sectors. Cost reductions in components and AI improvements now allow humanoid robots to learn tasks autonomously, making them useful in settings that require human-like abilities. Earlier this year, Coatue contributed to a $675 million investment in Figure AI, a California-based company working on its second-generation humanoid robot, NEO.
The broader role of humanoid robots
Humanoid robots are emerging as versatile tools in many fields. They support complex manufacturing processes, perform healthcare tasks, and engage in customer service roles. In disaster response, they can handle high-risk situations, while in homes, they offer companionship and assistance with daily chores. Investors, including Coatue, are positioning themselves to benefit from these capabilities with the new AI fund, which aims to support the development and adoption of such advanced AI-driven technologies.
With this new $1 billion fund, Coatue Management is betting on AI and robotics to drive the next wave of technological innovation and meet the demands of evolving industries.
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