Written by: Li Xiaoyin
Artificial intelligence is creating wealth at an unprecedented speed and scale, giving rise to a new batch of billionaires.
According to CB Insights data, there are currently 498 AI ‘unicorn’ companies worldwide valued at over $1 billion, with a total value of $2.7 trillion. Among them, 100 companies were established in 2023 and beyond, and more than 1,300 companies have valuations exceeding $100 million.
At the core of this wealth feast is the remarkable fundraising capability and skyrocketing valuations of AI startups. Anthropic is negotiating to raise $5 billion at a valuation of $170 billion, nearly doubling its valuation since March. Thinking Machines Lab, founded by Mira Murati, the former CTO of OpenAI, completed a $2 billion seed round in July, setting a record for the largest seed round in history.
This round of wealth creation is not limited to startups; the soaring stock prices of public tech giants like Nvidia, Meta, and Microsoft, along with the booming infrastructure companies like data centers, collectively form the panorama of this AI wealth explosion.
Andrew McAfee, a principal researcher at MIT, stated:
‘Looking back at the data from the past 100 years, we have never seen such a scale and speed of wealth creation; it is unprecedented.’
A new group of billionaires is emerging rapidly.
This year's major funding rounds are creating new billionaires in bulk. According to Bloomberg's estimate in March, the four largest private AI companies have created at least 15 billionaires, with a total net worth of $38 billion. Since then, more than a dozen unicorn companies have been born.
According to media reports citing informed sources, Anthropic AI's CEO Dario Amodei and his six co-founders are now likely billionaires with fortunes worth billions. Additionally, Anysphere was valued at $9.9 billion during its June funding round and reportedly received valuation bids of $18 billion to $20 billion a few weeks later, likely making its 25-year-old founder and CEO Michael Truell a billionaire.
It is worth noting that most of the current AI wealth still exists in the form of 'paper riches' in private companies, making it difficult for founders and equity holders to cash out immediately.
Unlike the internet bubble of the late 1990s, when many companies rushed to IPO, today’s AI startups can remain private for longer due to sustained investments from venture capital, sovereign wealth funds, family offices, and other tech investors.
Although the IPO channel has narrowed, the new AI elite are not without ways to convert paper wealth into liquidity. The rapid development of the secondary market provides them opportunities to sell equity, and structured secondary sales or tender offers are becoming increasingly common.
OpenAI’s ongoing secondary stock sale negotiations are a typical example aimed at providing cash for employees. Moreover, many founders can also secure loans through equity pledges.
Mergers and acquisitions are another important liquidity event. According to CB Insights, since 2023, there have been 73 liquidity events in the AI field, including mergers, IPOs, reverse mergers, or majority stake acquisitions.
For example, after Meta invested $14.3 billion in Scale AI, its founder Alexandr Wang joined Meta's AI team. Meanwhile, Scale AI co-founder Lucy Guo, after leaving the company in 2018, used her equity wealth to purchase a mansion in Hollywood Hills for about $30 million.
Wealth creation is highly concentrated in the Bay Area.
This wave of AI enthusiasm is geographically concentrated in the San Francisco Bay Area, reminiscent of Silicon Valley during the internet era.
According to data from the Silicon Valley Institute for Regional Studies, last year Silicon Valley companies received over $35 billion in venture capital. Additionally, reports from New World Wealth and Henley & Partners indicate that the number of billionaires in San Francisco has reached 82, surpassing New York's 66. Over the past decade, the millionaire population in the Bay Area has doubled, while New York's increase has been 45%.
The influx of wealth has directly boosted the local economy. According to Sotheby’s International Realty data, the number of homes sold in San Francisco for over $20 million last year reached a record high. The city, which faced a 'doom loop' a few years ago, is now experiencing a significant rise in rents, home prices, and demand driven by AI.
McAfee stated:
‘The geographical concentration of this AI wave is astonishing. Those who know how to create, fund, and grow tech companies are all there. For 25 years, I've heard people say, 'It's the end of Silicon Valley' or that some place is the 'new Silicon Valley,' but Silicon Valley remains Silicon Valley.’
The wealth management industry is facing new opportunities and challenges.
As time goes on and the potential for IPOs in the future arises, the substantial wealth created by these private AI companies today will eventually become more liquid, bringing historic opportunities to the wealth management industry.
According to tech consultants, all mainstream private banks, large brokerage firms, and boutique investment banks are actively reaching out to AI elites, hoping to win their business.
However, serving this new elite is not an easy task. Simon Krinsky, Executive Managing Director of Pathstone, pointed out that much of the AI wealth is still locked in illiquid private company equity. He believes that compared to employees who worked at large public companies like Meta or Google, the proportion of illiquid wealth among the new AI billionaires is much higher.
Krinsky expects that AI billionaires will follow a similar behavioral pattern as the internet elites of the 1990s: initially using excess liquidity to invest in similar tech companies they know through their networks, and after experiencing high volatility and concentrated risks in speculative industries, ultimately turning to professional wealth management services for diversification and professional protection.