Cathie Wood Talks Elon Musk at Milken

0:00So there's a lot of noise about AI, but time's too tight for more promises. So let's talk about results. At IBM, we work with our employees to integrate technology right into the systems they need. Now, a global workforce of 300 ,000 can use AI to fill their HR questions, resolving 94 % of common questions. Not noise. Proof of how we can help companies get smarter by putting AI where it actually pays off, deep in the work that moves the business. Let's create smarter business.

0:57IBM. rates may apply. JPMorgan Chase Bank, NA. Member FDIC. Copyright 2026. JPMorgan Chase and Company. When you're running a business, the best days are the ones where priorities stay on track. For midsize and large companies, risk can affect multiple parts of the organization at once, from property and liability to cyber and regulatory challenges. At that level, managing risk becomes an ongoing discipline. At the Hartford, the focus is on helping businesses manage risk before it turns into something more disruptive. And when losses do happen, that work is paired with insurance coverage shaped by years of underwriting, risk engineering, and claims experience.

1:38Learn more at thehartford.com slash risk mitigation. Policies provided by Hartford Fire Insurance Company and its property and casualty affiliates, Hartford, Connecticut.

1:49Cathie Wood:Bloomberg Audio Studios. Podcasts.

1:53Carol Massar:Radio. News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. We welcome everybody on Bloomberg Radio, Bloomberg TV, across Bloomberg platforms. Yes, indeed. Carol Masser, Joe Matthew here at the Milken Institute Global Conference. We have a special guest and I feel like reading in this morning, the headlines were made. It's like they knew Kathy was going to join us. Kathy Woods, CEO, CIO, and of course the founder of ARK Invest. It's so nice to talk with you again. Thanks so much.

2:21Cathie Wood:Delighted to be here. You gave me my big break in 2015. I'll never forget that.

2:26Carol Massar:Well, it's so funny because I want to talk Elon because you kind of put him for me on the radar. And I just feel like it was a time when so many people questioned what he was up to. Now everybody is so excited about the SpaceX IPO. We see increasingly how he's kind of melding his universe together. Tell us about kind of that bet. And even today we have that he's building a chip factory, at least$55 billion in investment, maybe as much as almost$120. And he's doing this chip factory, SpaceX with Tesla. How are you looking at Elon right now and what his next era is?

3:01Cathie Wood:So this is why I founded ARK Invest. We knew that the seeds that were planted in the 20 years that ended in the bubble, they've been germinating for 20, 25 years, and now they're flourishing. And what we're seeing is 15 different technologies evolving, and they're all converging. And Elon, about six months ago, and we've been using the word convergence for a long time, And he said, you know what? I think my companies are converging more than even I understood. And so we're seeing, of course, SpaceX, XAI, rumors about Tesla. And really, he believes that in the new world, or to create the new world, a company has to be vertically integrated.

3:48Cathie Wood:And so that's what's happening here. He is moving into incredible vertical integration as he moves data centers into space.

4:01Carol Massar:Is it all about our Bloomberg Intelligence, George Ferguson, cover space, cover his defense? But he said it's all about Elon controlling the supply chain, Kathy. But I do feel like globally we're seeing countries, companies really thinking about their supply chain. Is that part of his strategy?

4:15Cathie Wood:Absolutely. Absolutely. And also when a company is breaking new ground, literally in this case, and really inventing something, the supply chain doesn't exist very often or not all parts of it exist. And I think also as he's discussing, you know, where he's going and how he's going to do it, he is getting the supply chain ready. You know, he always sets the time frame, you know, much sooner than most people expect. But it's to get his employees and the supply chain focused because when he moves, he moves fast. You've really helped to define people's perception of Elon Musk and the company Tesla largely as one that is not about making cars, but one that's about autonomy and robotics.

5:08When you walk out the Hilton here, different than where I live in Washington, D.C., driverless Waymos are picking people up and driving away with them all day long. The mainstreaming of autonomous vehicles is just about here. I'd like to know if you see that actually fulfilling itself in the next year and if this is a zero-sum game or you're going to have Uber, Waymo, Tesla all involved.

5:31Cathie Wood:Okay, this is where vertical integration comes back into the conversation. In the robo-taxi world, Tesla's vertically integrated and has created the platform upon which others will build their companies. So I credit our team. So Tasha, Daniel, Brett Winton, we have been focused on this from day one, 2014, when I founded ARK. And yes, slowly, slowly, then all at once. So vertical integration for Tesla means it will have the lowest cost structure by far. Now, it's going to use Uber's umbrella here,$3 plus per mile. But if our analysis is correct, those costs as robotaxis scale are going to drop to 25 cents per mile.

6:26Cathie Wood:Think about it. The cost of transportation is going to collapse here. And no one, Waymo's cost structure, according to our estimates in 2030, will be 50 percent higher than Tesla's because they're dependent on other auto manufacturers and others in the supply chain that Tesla is not.

6:47Carol Massar:How are you thinking about the SpaceX IPO, Kathy? Do you anticipate there's so much enthusiasm going into it? Massive size, massive interest. But do you think there'll be a drop off initially after, you know, once it makes its public debut and then ultimately kind of play out like Tesla did that eventually it goes up again? Like, how do you see the trajectory? Right.

7:09Cathie Wood:So this is only at least what we know so far,$75 billion. There is so much demand out there. We have in our venture fund, so ARKVX, SpaceX is the largest position. And because we're direct to consumer when it comes to venture, although the fund has scaled north of$850 million, investors had to look for us. And how did they find us? They were looking for SpaceX. So the demand is voracious out there. Only$75 billion. Yes, it's a big IPO. But just think about how SpaceX has reawakened the dream of space exploration. This has captured the imagination not just of investors, but really everyone. So does that mean you don't think it'll fly?

8:02Cathie Wood:You think the enthusiasm will continue? Do you think there will be some settling in afterwards? I think there'll be supply-demand imbalance in the beginning. you'll see that pop it will be volatile I would imagine but we hope to to serve in terms of providing our research we've already got a SpaceX model out there on our site arc-invest.com we have not added data centers orbital data centers in however our preliminary work suggests that that part of the business could take, relative to our existing model, could take Tesla from a revenue generation point of view, orders of magnitude higher, 10, 20 times higher.

8:46Cathie Wood:I'm so glad you went there.

8:47Carol Massar:Data centers in space, and I mentioned before we got going, it came up on a real estate panel where so many of the real estate investors, even like related companies, have switched their focus to data centers. But we brought up data centers in space. What does that mean, though, then, for all of the data center buildout and money that is happening here on Earth? Does that mean a lot of that goes away? There's a little bit of a bubble?

9:09Cathie Wood:Like, how do we reconcile that? We think, and this is the important judgment call, is this hype? Is this 1999? I can tell you unequivocally, it is not. As I mentioned, the seeds were planted then. Now we're ready. And we think this technology revolution is going to dwarf the industrial revolution by far. So I think that we'll need the orbital data centers. And, of course, Elon is informed by his experience in Memphis, Tennessee, and now Mississippi. Memphis became not in my backyard. You're increasing my electricity prices, and you're ruining our land. And so he's basically saying, I'm not going to have to worry about not in my backyard in space.

10:01Cathie Wood:But does it make a bubble of the stuff on there? I don't think so. I don't think so. We think we're going. We need all of this.

10:06Carol Massar:Yep. Sorry. I know I'm dominating. I didn't mean to. I mean, you guys should walk away with this. I was about to ask you about something that took place today. You woke up and saw your third largest holding. Yes. Just go through the roof in AMD. another blow the doors off quarter. And it's really creating this question now about whether we should be paying a lot more attention. The market is to CPUs after GPUs went crazy. We're looking at people take money out of NVIDIA now and chase stocks like AMD. Do we need both or is that where you're looking?

10:38Cathie Wood:We think we need both. I do think there is more competition. We want it. We need it. But it was interesting. Sarah Fryer at OpenAI, I'm going to give her a shout out because I heard her speak and she she was saying, you know, people are chasing GPUs. They're going to be really shocked at how agentic AI activates CPUs and inference generally activates CPUs. Yesterday, Lisa Su provided a stat we had never heard before. Right now, for every CPU, there are four to five GPUs when it comes to enabling AI. Lisa thinks it's going to go one-to-one in the future. I think that has been the sleeper. And you see, Intel has taken off.

11:30Cathie Wood:In fact, we're seeing a lot of stocks that were, you know, they were very big in the bubble. And I just said to our team today, I said, what's going on? We're going back to the future. You know, Intel resurrecting. Isn't that right? Yes. And Flextronics. It's now called Flex. Boom. So I think we need it all. Not to mention data storage, which has been one of the most remarkable examples of a shortage creating a monster rally. So you need these old-fashioned chips to get to this new fashion AI.

12:01Carol Massar:All hands on deck. We want to ask you about a story that came out, Google, Microsoft, to give U.S. agency early access to AI models. So basically the White House vetting AI models. Is this good or bad?

12:13Cathie Wood:Knowing this administration and David Sachs, our AIs are, I don't think we're talking about heavy regulation here. We might be talking more about national security. National security, we heard this with Mythos, you know, software that, you know, has been in place for 60 years and never been penetrated. AI can find these vulnerabilities. So they're probably trying to tighten up a lot of what we do out there and make sure that our industries are safe. Doesn't that bring a political implication, though, to what may or may not be available to people if the White House is choosing which platform we ought to use?

12:54Cathie Wood:You know what's interesting, and this is taking a leaf from OpenAI in its early days. ChatGPT are saying, we don't think we can release this. This is too powerful. It's great marketing. It's true that it's very powerful, but it's also great marketing. A lot of the people at Anthropic came from OpenAI. So while they're blazing trails, no question about it, and they're leapfrogging one another, which is great. Competition is great for us here, including competition from China. I think that, you know, we're on our way.

13:33Carol Massar:I want to ask you about stablecoins, Tether and their potential. Do you think it has a chance to become big in the U.S. under the Genius Act? And you've also invested in Circle. Are you looking at other stablecoin related players beyond that? Crypto Bill, tell me. There's a lot going on right now.

13:49Cathie Wood:There is a lot going on.

13:50Carol Massar:There's a big meeting at Moro Lago. I know a lot of crypto folks tell us.

13:54Cathie Wood:Well, and you know, in the last election, I do think the crypto community was very, was part of the swing factor because they knew deregulation would take place under this administration. That's absolutely true. So yes, we're seeing the deregulation. You know, this is this is creating a new financial world order. Many people think the dollar should be going down because of our deficit and debt and all of that. And what we're seeing here in the United States is deregulation, tax cuts, and a very business friendly, very business friendly administration. We think the return on invested capital is going to go up in the U.S.

14:40Cathie Wood:generally. and we think that the crypto revolution, we were at risk of losing it.

14:46Carol Massar:Yeah.

14:46Cathie Wood:And yes, we do think USAT has a shot. You do? Yes.

14:51Carol Massar:All right. I'm not going to, I have like a million more questions. I'm going to do an hour. Kathy, thank you so much. Really appreciate it. Erin and Joe, thank you. Thank you so much. Really appreciate it. Kathy Wood, of course, she's the CEO, CIO, and of course, founder of ARK Invest. Someone like us, it was 10 years ago that we first started talking. Yes. about Elon Musk. So really tremendous to catch up with her again.

15:17Carol Massar:If you follow markets, you know the value of long-term thinking. You plan, you diversify, you prepare for volatility. But even the best strategies can't prevent every bad day. For more than 75 years, Cincinnati Insurance has helped individuals and businesses navigate tough moments with expertise, personal attention, and independent agents who focus on relationships, not transactions. The Cincinnati insurance companies. Let them make your bad day better. Find an agent at CINFIN.com. Sinesta Travel Pass makes traveling more rewarding, designed to help you get more out of every stay. Sign up at Sonesta.com to enjoy instant savings, bonus points, and valuable perks like early check-in, late checkout, room upgrades, and free stays over time.

16:09With Sonesta Travel Pass, every stay brings you closer to your next reward. Choose from more than 1 ,100 hotels across 13 distinctive brands and unlock the best available rates when you book direct with Sonesta Travel Pass. Here today, roam tomorrow. Join now at Sonesta.com. Terms and conditions apply. As industries evolve faster than ever, companies need an environment that accelerates strategic growth, and Michigan delivers on that promise. From emerging startups to global enterprises, Michigan offers what executives value most, a resilient, innovative ecosystem, diverse communities that attract top talent, and a quality of life that supports work-life balance.

16:48With our unified Team Michigan approach, businesses scale faster and compete at the highest level. Michigan, pure opportunity. Seize your opportunity at michiganbusiness.org.