• D1’s Dan Sundheim and SurgoCap’s Mala Gaonkar spoke about investing in AI at a conference in Chicago.
• Sundheim said that for once, it won’t be private companies leading this technological change.
• Gaonkar said the most promising industry for near-term advancements in AI is the field of medical technology.

The best way to invest in the world’s hottest trend is not through seed rounds or even full-fledged private companies, said D1 Capital Partners founder Dan Sundheim, despite Billions flow into artificial intelligence start-ups last quarter only.

Sundheim, whose portfolio includes billions invested in public and private companies, believes that the best way to exploit the AI Frenzy is done through public companies. Speaking at the Invest for Kids conference in Chicago on Tuesday, he said that AI, unlike other major technological advances, will be felt across all industries and therefore all companies have an interest in investing in it. money.

Large public companies have the most resources to implement AI into their businesses, according to a summary of his comments seen by Business Insider. In other words, scale is more of an advantage in AI than agility.

He said companies that invest capital and talent in AI projects do so without expecting a short-term return on investment. The infrastructure required by these projects, he said, means companies are looking at payback in a decade, not a quarter.

Sundheim was speaking on a panel with Mala Gaonkar, the former Lone Pine executive who launched SurgoCap Partners in early 2023. From her perspective, AI will impact industries at different times, so over the course of Over the next three to five years, it is crucial to know which areas will see immediate benefits and which sectors will take time.

Gaonkar said medical technologies, such as diagnostic imaging, are expected to benefit from advances in AI sooner than other sectors.

Sundheim also said that because of the need for AI infrastructure, there would be investment opportunities in companies that provide the equipment needed to modernize the power grid.

Both companies have had good years investing in the public markets.

Gaonkar’s fund is up more than 25% this year, BI previously reportedas assets reached over $3 billion. Sundheim’s D1, which regulatory filings show manages about $26 billion, is up more than 34% in its public book, although its venture capital investments have been reduced by 2.6% to now in 2024, according to a recent report from Institutional Investor.

Both funds are part of Julian Roberston’s broader strategy, Tiger Management. Tigers Networkwhich is known for its focus on growth stocks, particularly in the technology sector. Sundheim, who was CIO at Viking Global before launching D1 in 2018, joined funds like Tiger Global and Coatue in 2020 and 2021 in their aggressive financing of private companies. PitchBook notes that the firm has made 228 investments in private companies over the past six years.

Even though the private portfolio has weighed on Sundheim’s overall returns over the past three years – and he is now looking to public giants for exposure to AI – he still said Tuesday that the company most exciting thing in the world was private: Elon Musk’s SpaceX.

D1 has a stake worth approximately $2.5 billion in the company, according to Report II.

Both companies declined to comment.