8 Big Claims in Cathie Wood’s ARK Invest Outlook

In
its
annual
research
paper
–

Big
Ideas
2024:
Disrupting
the
Norm,
Defining
the
Future –
ARK
outlines
the
sectors
it
expects
will
transform
global
economic
activity.
But
it
also
makes
a
number
of
bold
claims
ranging
from
the
predictable
to
the
outright
contentious.

So,
what
are
these
ideas,
and
will
they
create
a
blissful
existence
or
a
dystopian
nightmare?

Claim
#1:
AI
is
Bringing
The
Slackers
to
Heel

In
ARK’s
view,
artificial
intelligence
(AI)
has
already
boosted
productivity.
That’s
amid
a
debate
about
the
quality
of
AI
applications
and
the
impact
of
the
world
of
machine
learning
on
jobs.
But
according
to
ARK,
helping
“underperforming”
workers
to
do
better.

“Coding
assistants
like
GitHub
Copilot
and
Replit
AI
are
early
success
stories
that
have
boosted
the
productivity
and
job
satisfaction
of
software
developers,”
ARK
says.

“AI-powered
assistants
are
[also]
increasing
the
performance
of
knowledge
workers
and,
interestingly,
benefiting
underperforming
workers
relatively
more
than
high
performers”.

Claim
#2:
Your
Manager Should
Hold
Bitcoin

In
our
special
week
of
content
on
the
topic
of
governance,
we
asked

whether
cryptocurrency
(and
specifically
Bitcoin)
was
ungovernable.
From
a
governance
perspective,
ARK
describes
Bitcoin
as
“decentralised
and
community-driven”,
leveraging
open-source
software
for
decision
making.
That’s
one
take!
Morningstar
has
long
argued
it
lacks
intrinsic
value.

In
a

February
2022
video,
Morningstar’s
global
chief
research
and
investment
officer
Dan
Kemp
reminded
investors
that “some
things
appear
to
have
a
value
just
because
they
are
popular.
But
as
with
all
fashions,
that
popularity
can
disappear
overnight
and
suddenly
you
find
the
thing
that
you
thought
had
value
doesn’t
really”.

ARK
disagrees.
In
its
view,
digital
assets
like
Bitcoin
are
an
asset
class
in
themselves
that
derive
intrinsic
value
from
the
digital
economy.
And
institutional
investors
should
own
them. It
even
goes
so
far
as
to
say
fund
managers
could
have
improved
their
risk-adjusted
returns
in
2023
by
holding
it.
According
to
its
research,
portfolios
seeking
to
maximise
risk-adjusted
returns
could
have
allocated
19.4%
to
Bitcoin
in
2023
due
to
its
performance.

Claim
#3:
Early
Days
Yet
For
VR
and
The
Metaverse

Although
big
companies
like
Apple
and
Meta
have
launched
digital
headsets,
there
is
still
some
hesitancy
around
virtual
reality,
ARK
says.
Remember
October
2022
and
the
controversy
over

just
how
un-virtual
the
legs
were
in
Meta’s
Metaverse
demo?

Meta
Quest,
for
instance,
only
offers
a
fraction
of
the
apps
the
iPhone
did
in
the
first
five
years
after
its
initial
launch.
ARK
also
observes
Meta
has
only
sold
27
million
Quest
units –
a
mere
18%
of
the
146
million
iPhones
Apple
sold
cumulatively
five
years
after
launch.  

Claim
#4:
Curing
Rare
Disease
is

Good!

Elon
Musk
isn’t
the
only
one
combining
technology
with
medical
intervention.

Ark
is
excited
about
the
development
of
what
it
calls
“precision
therapies”,
inclduing
gene
editing
medicines,
which
it
says
have
the
potential
to
cure
rare
genetic
diseases
that
are
currently
untreatable.
For
this
it
cites
sickle
cell
disease
(SCD),
the
rare
inherited
blood
disorder
it
says
could
be
cured
with
precisely
this
approach. 

“SCD
is
an
inherited
red
blood
cell
disorder
that
affects
more
than
100,000
people
in
the
US
and
20
million
people
globally,
primarily
in
Africa,”
it
says.

“Today,
therapeutics
account
for
~16%
of
the
total
spent
on
treating
SCD
disease
in
the
US,
but
they
have
done
little
more
than
manage
symptoms,
as
the
life
expectancy
of
SCD
patients
is
only
56%
that
of
the
general
population”.

But
why
stop
there?

In
a
stunning
statement
of
the
obvious,
ARK
has
come
to
the
realisation
that
“curing
all
rare
diseases
would
be
valuable”.

“Theoretically,
curing
all
rare
diseases
would
shift
most
of
the
costs
to
medication,
obviating
the
need
for
in-
and
out-patient
disease
management,
underscoring
the
value
of
a
cure,”
it
observes.

Claim
#5:
The
EV
Revolution
Will
Complete
by
2030

Self-driving
cars;
autopilots;
robotaxis.
All
of
these
are
the
future,
according
to
ARK.
It
expects
that,
with
the
rise
of
robotaxi
platforms
and
with
electric
vehicles
(EVs),
EV
sales
will
grow
33%
at
an
annual
rate
over
the
next
seven
years,
from
roughly
10
million
in
2023
to
74
million
in
2030. 

Battery
costs
are
also
falling
after
a
period
of
rising
prices
due
to
supply
chain
disruptions,
it
adds,
which
in
turn
should
drive
EV
prices
lower.
That
could
increase
growth
in
unit
sales
as
EVs
become
more
affordable.
Ark
points
to
Tesla’s
rise
in
the
absence
of
an
established
supply
chain,
which
gave
it
no
choice
but
to
vertically
integrate.
 

But
as
we
know
from
the
Tesla
case,
the
market
factors
that
made
the
Elon
Musk-led
company
the
biggest
US
equity
talking
point
of
2021

won’t
necessarily
work
in
favour
of
competitors
like
Rivian,
whose
pure-play
business
model
could
fail
to
convince
US
citizens
in
harder-to-reach
rural
areas.

Claim
#6:
AI
Can
Out-Fly
USAF’s
Top
Guns

Sticking
with
the
theme
of
transport,
it’s
not
just
cars
that
will
sit
in
the
throes
of
the
technology
revolution.
ARK’s
research
finds
AI
is
beating
human
pilots
and
drivers,
and
will
encourage
regulators
to
approve
of
certain
autonomous
operations.
AI
pilots
have
data
advantages
over
their
human
counterparts,
it
says.
According
to
research,
Zipline
drones
log more
commercial
flight
miles
than
humans
can.  

The
terrifying
military
implications
are
also
in
the
crosshairs.
In
simulated
F-16
dogfights
with
a
human
expert
fighter
pilot,

AI
copilot
Shielded
AI
won
the
fight.
And
in
drone
races,
AI
outperformed
professional
human
pilots 15
out
of
25
times,
producing
lap
times
that
were
10%
faster.
Hand
in
your
epaulettes
at
the
departure
lounge!

Claim
#7:
Reusable
Rockets
Will
Revolutionise
Travel  

This
was
Musk’s
vision
from
the
get-go.
Perfect
a
re-usable
commercial
rocket
and
you
bring
the
cost
of
space
travel
to
heel.
ARK
is
bullish
too,
citing
SpaceX’s
Falcon
9
as
the
best
example
of
a
company
ending
soaring
launch
costs.
Falcon
9
was
reused
numerous
times,
and
the
initial
stages
of
re-use
cost
less
than
$1
million,
ARK
says.
Rocket
turnaround
time
is
now
proportional
to
costs,
it
adds.

It
also
sees
knock-on
effects
for
satellite
connectivity
and
hyper-sonic
flight,
the
latter
of
which
could
achieve
revenues
of
around
$35
billion
by
the
end
of
the
decade.
At
scale,
hypersonic
flight
could
reach
revenues
of
$350
billion,
it
says. 

Claim
#8:
This
Town is
Big
Enough
For
The
Both
of
us 

We’ll
finish
where
we
began:
with
machines.

ARK
observes
a
potential
explosion
in
robot
deployment,
with
man-made
machines
outperforming
humans
in
tasks
in
multiple
arenas.
The
cost
of
robots
has
been
dropping
50%
for
every
cumulative
doubling
in
production,
ARK
says,
and
technological
advances
mean
robot
performance
has
improved
33-fold
over
the
last
seven
years.

The
best
bit?
Humans
and
robots
will
work
together
in
harmony,
ARK
argues,
and
in
factories
as
well
as
in
the
home.

Cup
of
tea?
“I’ll
put
the
kettle
on.”
“Kettle
already
engaged,
sir”.
*bleeps*

WATCH:

We
interviewed
Cathie
Wood
last
year.
Here’s
what
happened…

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