In recent developments, private investment firms owned by ultra-wealthy individuals have shown a noticeable decline in their deal-making activities, largely attributed to concerns over President Donald Trump’s tariffs. As reported by CNBC, these single-family offices completed 40 direct investments in April, reflecting a significant 31% decrease from the previous month and a 47% decline compared to the same period last year. This data, sourced from Fintrx, highlights a shift in investment dynamics within these private firms. Despite this broader slowdown, there remains a steady interest in artificial intelligence (AI)-related startups. In fact, these startups accounted for half of the direct deals made by family offices last month. One notable example is SandboxAQ, a quantitative AI firm that successfully concluded its Series E funding round in early April, raising $450 million. This funding round was increased twice to accommodate growing investor demand, according to CEO Jack Hidary. The firm initially secured $300 million in December from an array of billionaire investors and their family offices, including venture capitalist Jim Breyer, Salesforce CEO Marc Benioff, and Two Sigma co-founder David Siegel. This spring, the round was extended, bringing in an additional $150 million from Ray Dalio’s family office, along with contributions from Google and Nvidia, both of which are existing partners of SandboxAQ. Based in Palo Alto, California, SandboxAQ emerged as a spinoff from Alphabet in 2022. The company is chaired by former Google CEO Eric Schmidt, with his family office, Hillspire, listed among its backers. CEO Jack Hidary emphasizes the value brought by these family offices due to their profound understanding of both the tech and finance sectors. He notes that these investors are seasoned executives and entrepreneurs who actively provide advice and support to the company. SandboxAQ leverages AI and quantum technology to offer large-scale predictions and statistical analysis across various industries, such as drug discovery, cybersecurity, navigation, and financial modeling. The firm’s technology is designed to analyze extensive numerical datasets, thereby facilitating the creation of predictive AI models. Hidary, a serial tech entrepreneur, observes that in recent years, there has been a growing appetite among professionally managed family offices and large institutions for investing in deep-tech startups that cater to business needs. He explains that historically, investors viewed deep tech as outside their area of expertise, preferring not to engage with it. However, attitudes have shifted as investors now recognize that deep-tech companies, with their robust protective barriers, present lower risks. They have learned from experience that while consumer-oriented tech may gain rapid user traction, it is often easily commoditized, lacking the sustainable competitive edge seen in deep-tech firms. Family offices tend to make quicker investment decisions compared to traditional institutional investors, but some still prefer to gain a thorough technical understanding before committing funds, Hidary notes. For example, Jim Breyer engaged in multiple discussions with Hidary, covering relevant chapters from two books authored by Hidary, before making an investment. Similarly, Ray Dalio’s decision to invest followed years of dialogue with Hidary, beginning with conversations in Abu Dhabi about AI's economic impact. Hidary stresses the importance of aligning with family offices that have a long-term vision, avoiding those looking for quick returns. “We’re looking to build a global company in the top echelon of tech companies," he states, adding that while this ambition attracts certain investors, it may not be suitable for every family office. In summary, while the overall deal-making activity among ultra-rich private investment firms has slowed, AI-related startups like SandboxAQ continue to capture significant interest and investment. This trend underscores a strategic pivot among wealthy investors towards deep-tech ventures that promise long-term value and impact across various industries.