Written by David Bain and published on Family Capital on 9th January 2025
It’s too difficult to make money out of AI, says billionaire family office principal
A serial entrepreneur who made his fortune in gambling reckons it’s too difficult to make money in artificial intelligence, at least for his family office.
Billionaire David von Rosen, who founded the Gibraltar-based gambling business Lottoland in 2013, told Family Capital, “I find it really hard to find an avenue to make money in the AI boom as a small family office.”
Von Rosen runs his eponymous family office from his base in Switzerland and has invested in various sectors since stepping down from running Lottoland in 2020.
In the last few years, the venture sector has been dominated by AI startups, and a slew of institutions and family offices have invested in the sector.
The German national relocated to Switzerland that year and set up a family office, Vonrosen, becoming a full-time investor. Before founding Lottoland, he set up the Berlin fashion brand also called Vonrosen, which famously had Steve Jobs as a customer. Unfortunately, the fashion group had to close down after an IP conflict with a big German competitor, or Von Rosen may have achieved billionaire status that much quicker.
Last year, he also launched a high-end residential property development group in Dubai called 25 Degrees.
Von Rosen also knows his way around investing. He’s done deals in various sectors, including the very successful UK-based fintech group Revolut, defence tech startup Tytan Technologies, and solar energy business MaxSolar. He has also invested in cryptocurrencies and is bullish on the sector.
But von Rosen, who also holds a PhD in economics, thinks direct investing in AI isn’t for smaller family offices like the one he runs. He believes the big guys will win the race, and while investing in the stocks of these companies can deliver results, direct investing in the AI world is more challenging.
That said, his family office has invested in the AI-enabled startup DeepL, which provides advanced translation services using AI and deep learning technologies.
In the last few years, the venture sector has been dominated by AI startups, and a slew of institutions and family offices have invested in the sector. Family-backed Motier Ventures has been one of the most enthusiastic backers of AI startups, backing groups like Mistral AI and many others.
But Motier, Family Capital’s Investment Group of the Year for 2024, has deep pockets, backed by the family’s huge retail business, Galeries Lafayette Group, and other well-established companies.
According to FamCap Analytics numbers, more than 150 family/principal investment groups have directly invested in AI or AI-related businesses.
That said, the AI boom of the last few years has, many feel, a bubble-like quality, which could burst at any time. If that happens, many of the startups that have been sold on the basis of AI-enabled technology will be in for a rough ride. In such a scenario, big tech will likely clean up and consolidate its sector control even more.
So, von Rosen might have a point—smaller family offices should be wary of investing directly in the sector unless they are willing to take on a lot of risk.
Link to article here.
