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Family offices prefer to bet on AI boom with stocks versus startups and VC funds

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  • Private investment firms of the ultra-wealthy have made splashy deals backing AI startups.
  • But the majority of family offices are investing in artificial intelligence via public equities, per a recent survey by Goldman Sachs.
  • Family offices were also more likely to report investing in companies that leverage AI for productivity and efficiency or secondary beneficiaries of the AI boom such as energy providers than startups, according to the survey.
Young Asian woman holding smartphone with a computer generated background. Innovation, metaverse and futuristic concepts.
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A version of this article first appeared in CNBC’s Inside Wealth newsletter with Robert Frank, a weekly guide to the high-net-worth investor and consumer. Sign up to receive future editions, straight to your inbox.

Investment firms of the ultra-wealthy, such as the family office of Jeff Bezos, are making headlines with massive fundraises for artificial intelligence startups.

Late last month, Bezos Expeditions co-led a $405 million round for robotics startup Field AI with backers including Laurene Powell Jobs’ Emerson Collective. In the past six months alone, Hillspire, the family office of Google billionaire Eric Schmidt, has backed at least six AI startups, per data provided exclusively to CNBC by Fintrx, a private wealth intelligence platform.

But while tech unicorns get most of the buzz, family offices prefer to invest in the AI boom via public equities, according to a recent poll by Goldman Sachs. The bank’s survey of 245 worldwide family offices found that 52% are exposed to AI through primary public equities or ETFs, while only a quarter reported investing directly in AI startups.

Goldman Sachs’ Meena Flynn told Inside Wealth that family offices likely have even greater exposure through stocks than they realize.

“The top nine out of 10 stocks in the S&P are AI-driven stories, and they make up 40% of the S&P,” said the co-head of global private wealth management.

Flynn partially attributed the preference for AI stocks to more tempered valuations in public markets.

“If you look over the last five years, and you look at the valuation discrepancies between private markets and public markets, the private markets really needed to grow into the valuations that some of the [general partners] entered into,” she said. “People, I think, have more confidence in the public markets from a valuation perspective.”

Family offices were also more likely to report investing in companies that leverage AI for productivity and efficiency (38%) or secondary beneficiaries of the AI boom such as energy providers (32%) than AI startups. (Respondents were allowed to pick multiple answers). The report noted that 27% of family offices anticipated being overweight to energy and materials firms in the public and private markets in the next 12 months.

The respondents, two-thirds of which reported managing at least $1 billion in assets, were polled from May 20 to June 18. Nearly nine out of 10 reported some form of investment in AI. Only 5% indicated that they were not considering investing in the space.

Family offices are not known for their tech savvy, with Deloitte estimating the average age of family office principals at 68 years old. But Goldman Sachs’ Jean Altier said they have warmed quickly to AI as it’s become ubiquitous in everyday life, unlike other new technologies like blockchain. She gave the example of Google’s AI search function.

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“It’s already a part of people’s life,” said the global head of managed strategies. “I do think people’s native exposure to AI has happened a lot quicker than some other technological innovations.”

Despite respondents’ demonstrated preference for public equities, Flynn noted that accessing more opportunities requires investing in private markets.

“There are some 800 unicorns right now. If you assume historical IPO exit rate per year, it would take 12 years to clear the backlog versus four years pre-pandemic,” she said.

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Meta set to launch paid version of Facebook and Instagram for UK

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Meta Platforms will soon offer paid versions of Facebook and Instagram in the UK that will remove advertising from both platforms.

In the coming weeks, users will be given the choice to pay £2.99 (€3.42) a month to access ad-free versions of either service on the web, or £3.99 for the iOS or Android apps. Meta said it was charging more for access on apps because of subscription fees levied by Apple and Alphabet’s Google on their respective app stores.

The roll-out comes as Meta continues to try to tread the line between Europe’s strict approach to online privacy and growing sales generated from advertising, which accounted for 97% of its revenue last year. Meta will begin notifying users over the age of 18 that they can subscribe to Facebook or Instagram without seeing ads, the company said. They will still have the option to keep using the services for free with ads, it said.

The company released a more expensive version of its subscription-fee offering in the EU in 2023, but was slapped with a €200 million fine in April after regulators argued the model still breached the bloc’s digital antitrust rules and didn’t offer users a genuine free choice. Meta tweaked the system to bring it in line with EU regulation, but in July the European Commission asked for further changes, implying that the company might face daily fines if the overhaul is deemed insufficient.

Since quitting the European Union, the UK has been freer to take a softer approach to internet privacy and appears to have green-lit the roll-out in the UK. Meta said it had had extensive discussions with the UK’s privacy watchdog, the Information Commissioner’s Office.

“This approach and outcome sets the UK apart from the EU, where we have been engaged in similar discussions with regulators,” the company said in a statement. “EU regulators continue to overreach by requiring us to provide a less personalised ads experience that goes beyond what the law requires, creating a worse experience for users and businesses.”

The ICO said on Friday it “welcomed” the new model.

“This moves Meta away from targeting users with ads as part of the standard terms and conditions for using its Facebook and Instagram services, which we’ve been clear is not in line with UK law,” a spokesperson said. – Bloomberg

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Former Lib Dem leader Sir Menzies Campbell dies aged 84

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Catherine LystBBC Scotland

imageGetty Images Sir Menzies Campbell who has greay hair and glasses. He is wearing a dark suit and tie with a white shirt. He is standing in front of a blurred Houses of ParliamentGetty Images

Former Liberal Democrat leader Sir Menzies Campbell has died at the age of 84.

Sir Menzies, or Ming as he was widely known, led the Liberal Democrats from 2006 to 2007 and was the MP for North East Fife at Westminster for 28 years.

In his first career as a sprinter, he held the UK 100m record from 1967 to 1974 and ran in the 1964 Tokyo Olympics – being dubbed The Flying Scotsman.

Lib Dem leader Ed Davey described Sir Menzies as “a dedicated public servant and a true Liberal giant”.

He said: “His principled leadership opposing the Iraq War was a mark of his morality, courage and wisdom.

“But more than that, he was an incredibly warm and caring friend and colleague. We will miss him terribly.”

Sir Menzies died peacefully in London following a period of respite care. His grandson was with him.

His family said one of his final days was spent watching the Liberal Democrats Party Conference, and enjoying watching video messages from political friends.

Sir Menzies first stood as a candidate for the Liberal Democrats in 1976, but did not win his constituency for 11 years.

He made his name as the party’s foreign affairs spokesman, a position he held for 14 years and was a renowned critic of the Iraq war.

He became a member of the House of Lords in 2015. His official title was Baron Campbell of Pittenweem.

Scottish Liberal Democrat leader Alex Cole-Hamilton MSP said Sir Menzies was one of the “most respected politicians of his generation”.

He said: “The first political thing I ever did was to deliver leaflets for Ming on the morning of his first election to Parliament in 1987.

“He was my MP, he was my mentor and he was my friend. From the Olympic track to the benches of Westminster, his contribution to public life will long be remembered.”

imageGetty Images

Wendy Chamberlain, current MP for North East Fife, said Sir Menzies “remained a significant figure” in the area.

She added: “His contributions to our communities, to the University of St Andrews, as well as to Scotland and the UK were immeasurable.

“Although he found the passing of his beloved Elspeth difficult, rather than retreat, until the last weeks of his life, he was still travelling to London to contribute in the House of Lords.”

Born Walter Menzies Campbell on 22 May 1941, Sir Menzies was brought up in a Glasgow tenement.

He was educated at Hillhead High School and went on to the University of Glasgow, where he was a contemporary of both John Smith and Donald Dewar studying Law and debating in the union.

He also attended Stanford University in California during the Vietnam War and later became an advocate.

Sir Menzies was called to the Scottish bar in 1968 and made a QC (latterly KC) in 1982. The law gave him a lucrative career and he continued to practise throughout his time in politics.

His wife of more than 50 years, Elspeth, died in June 2023 – he described her as his “constant political companion, always my encouragement and forever my first line of defence”.

imageGlenn Campbell box

Menzies Campbell’s contribution to our politics was far greater than his short spell as party leader suggests.

His was an extremely well informed voice on defence and foreign affairs which was central to the public debate during and after the Iraq war.

He and his late wife Elspeth were the best of political company with a great deal of insight into the Westminster issues and characters of the day.

In many ways Elspeth was more ambitious for her husband than he was for himself. His period as party leader was not a happy one.

He was on the receiving end of a persistent ageism – caricatured as a grandfatherly figure with his best days behind him when compared with rival leaders like Tony Blair and David Cameron.

When appearing on TV for interview he always insisted on wearing a tie because he felt it was what his constituents would expect.

But I knew he’d given in to modernising advisers who wrongly thought they could reinvent his image when one Sunday morning he appeared in our studio in an open-necked shirt. It was not long before he resigned.

It was his wisdom, experience and courtesy that were his greatest strengths and these were undervalued qualities during his time at the top.

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Former Lib Dem leader Sir Menzies Campbell dies aged 84

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Catherine LystBBC Scotland

imageGetty Images Sir Menzies Campbell who has greay hair and glasses. He is wearing a dark suit and tie with a white shirt. He is standing in front of a blurred Houses of ParliamentGetty Images

Former Liberal Democrat leader Sir Menzies Campbell has died at the age of 84.

Sir Menzies, or Ming as he was widely known, led the Liberal Democrats from 2006 to 2007 and was the MP for North East Fife at Westminster for 28 years.

In his first career as a sprinter, he held the UK 100m record from 1967 to 1974 and ran in the 1964 Tokyo Olympics – being dubbed The Flying Scotsman.

Lib Dem leader Ed Davey described Sir Menzies as “a dedicated public servant and a true Liberal giant”.

He said: “His principled leadership opposing the Iraq War was a mark of his morality, courage and wisdom.

“But more than that, he was an incredibly warm and caring friend and colleague. We will miss him terribly.”

Sir Menzies died peacefully in London following a period of respite care. His grandson was with him.

His family said one of his final days was spent watching the Liberal Democrats Party Conference, and enjoying watching video messages from political friends.

Sir Menzies first stood as a candidate for the Liberal Democrats in 1976, but did not win his constituency for 11 years.

He made his name as the party’s foreign affairs spokesman, a position he held for 14 years and was a renowned critic of the Iraq war.

He became a member of the House of Lords in 2015. His official title was Baron Campbell of Pittenweem.

First Minister John Swinney said: “I am deeply saddened to learn of the passing of Lord Campbell – one of the most distinguished and well-liked political figures of his generation.

“I first got to know him well as a newly-elected MP where he welcomed me and helped me adapt to life in House of Commons. Over the years since, we often worked together on the many issues on which we agreed.”

He said Sir Menzies was “a passionate believer in a better Scotland” but also a strong internationalist – keen to build consensus and find common ground.

“Those entering public service today could learn much from his style – always forthright in speaking up for what he believed in, but never anything other than respectful, courteous and polite to his political opponents,” Swinney said.

“On behalf of the Scottish government I offer my condolences to Lord Campbell’s family. My thoughts today are with them, his Liberal Democrat colleagues and his many friends across the political spectrum and beyond.”

Scottish Liberal Democrat leader Alex Cole-Hamilton MSP said Sir Menzies was one of the “most respected politicians of his generation”.

He said: “The first political thing I ever did was to deliver leaflets for Ming on the morning of his first election to Parliament in 1987.

“He was my MP, he was my mentor and he was my friend. From the Olympic track to the benches of Westminster, his contribution to public life will long be remembered.”

imageGetty Images

Wendy Chamberlain, current MP for North East Fife, said Sir Menzies “remained a significant figure” in the area.

She added: “His contributions to our communities, to the University of St Andrews, as well as to Scotland and the UK were immeasurable.

“Although he found the passing of his beloved Elspeth difficult, rather than retreat, until the last weeks of his life, he was still travelling to London to contribute in the House of Lords.”

Born Walter Menzies Campbell on 22 May 1941, Sir Menzies was brought up in a Glasgow tenement.

He was educated at Hillhead High School and went on to the University of Glasgow, where he was a contemporary of both John Smith and Donald Dewar studying Law and debating in the union.

He also attended Stanford University in California during the Vietnam War and later became an advocate.

Sir Menzies was called to the Scottish bar in 1968 and made a QC (latterly KC) in 1982. The law gave him a lucrative career and he continued to practise throughout his time in politics.

His wife of more than 50 years, Elspeth, died in June 2023 – he described her as his “constant political companion, always my encouragement and forever my first line of defence”.

imageGlenn Campbell box

Menzies Campbell’s contribution to our politics was far greater than his short spell as party leader suggests.

His was an extremely well informed voice on defence and foreign affairs which was central to the public debate during and after the Iraq war.

He and his late wife Elspeth were the best of political company with a great deal of insight into the Westminster issues and characters of the day.

In many ways Elspeth was more ambitious for her husband than he was for himself. His period as party leader was not a happy one.

He was on the receiving end of a persistent ageism – caricatured as a grandfatherly figure with his best days behind him when compared with rival leaders like Tony Blair and David Cameron.

When appearing on TV for interview he always insisted on wearing a tie because he felt it was what his constituents would expect.

But I knew he’d given in to modernising advisers who wrongly thought they could reinvent his image when one Sunday morning he appeared in our studio in an open-necked shirt. It was not long before he resigned.

It was his wisdom, experience and courtesy that were his greatest strengths and these were undervalued qualities during his time at the top.

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