In Full: Cathie Wood Talks DeepSeek Market Lessons

Cathie Wood expressed confidence in the current market, highlighting the transformative potential of AI and the significant growth opportunities in sectors like autonomous mobility and healthcare, while also discussing the impact of regulatory changes. She emphasized Tesla’s competitive advantage in autonomous driving and shared optimism about innovation in the UK tech sector, despite broader regulatory challenges in Europe.

In a recent discussion, Cathie Wood expressed her confidence in the current market, stating that her firm is fully invested and optimistic about the broadening of the bull market. She acknowledged the ongoing success of mega-cap companies but raised questions about Nvidia’s dominance in the training chip market, suggesting that the demand for inference chips may soon outpace that for training chips. Wood highlighted the significant decline in innovation costs, particularly in AI, with training costs dropping by 75% and inference costs by 85-90% annually, attributing some of this acceleration to advancements in DeepSeek technology.

Wood emphasized the transformative potential of AI across various sectors, particularly in enhancing productivity for knowledge workers. She identified autonomous mobility, including robo-taxis, as a major growth area, projecting it to become an $8 to $10 trillion global opportunity. Additionally, she pointed to healthcare as a “sleeper” sector, where the convergence of sequencing technologies, AI, and gene editing (like CRISPR) could lead to groundbreaking advancements in disease treatment, including potential cures for diabetes.

Regarding regulation, Wood expressed optimism about potential deregulation under the Trump administration, particularly in the autonomous vehicle and healthcare sectors. She argued that a unified federal regulatory approach for robo-taxis would be more effective than the current state-by-state system. In healthcare, she noted that regulatory hurdles have stifled innovation and mergers, which could hinder price discovery and strategic growth in the biotech sector.

As for Tesla, Wood highlighted her anticipation for Elon Musk’s upcoming earnings call, hoping to hear about advancements in their autonomous driving system. She praised Tesla’s competitive advantage due to its extensive data collection from its vehicles on the road, which she believes positions the company favorably in the autonomous vehicle market. Wood dismissed concerns about Musk spreading himself too thin across his various ventures, asserting that his focus on solving critical pain points has been effective.

Finally, Wood discussed her recent visit to London, where her firm has launched three new funds focused on innovation in Europe. She expressed optimism about the UK’s potential for growth in the tech sector, particularly in venture capital and startup development. Wood noted that while the UK is making strides in deregulation, Europe as a whole faces more significant regulatory challenges that could impede its technological advancement. She concluded that the UK’s proactive approach to addressing these issues is promising for future investments.