SuRo Capital outlines OpenAI investment strategy, $1 trillion projection | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

This article is based on TheStreet’s Stock & Markets Podcast. Hosted by the veteran Wall Street investor Chris Versace, the weekly podcasts are available early to members of TheStreetPro investing club.

No big whoop? That’s what you think.

Whoop just happens to be a wearable technology company and it is one of many firms in which SuRo Capital (SSSS) , which has an estimated $200 million market cap, has invested.

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Mark Klein is the investment firm’s chairman and CEO and he sat down with Chris Versace, lead manager of TheStreet Pro Portfolio, to discuss how to get in early on growth-oriented companies.

“We’ve been around since 2011,” Klein said during the July 23 edition of TheStreet Stocks & Markets Podcast. “We’ve owned names over the years like Facebook and Twitter and Palantir, and Lyft and Spotify and Dropbox.”

“Slow down,” Versace said. “These are the big names driving the market today.”

“Absolutely,” Klein said, “and so our investors have been very fortunate that we’re able to provide access very early to those names. And we’ve continued to do that straight through to 2025.”

Investing in AI

And there’s no mystery as to how SuRo finds companies to back.

“It’s investing and it’s not easy,” Klein said. “We use both bottom-up and a top-down approach to investing our money. And we are typically in mid- to later-stage companies that are either institutionally backed or venture-capital-backed companies.”

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He looked back to 2022, when ChatGPT, the conversational AI chatbot developed by OpenAI, was introduced.

“Our first thought was what companies are going to benefit from it and what are going to be disrupted by it,” Klein said. “And that was the lens that we looked at companies through very much as we’re moving almost into through 2023 and into 2024.”

By 2024 ChatGPT made clear that it was going to be something massive, he said.

“We wanted to understand how directly to invest in AI,” Klein explained. “And not necessarily end-product-specific but picks and shovels — sort of the baseline of an infrastructure. And that’s how we ended up investing in CoreWeave, Open AI [and] Vast Data.”

SuRo also invested in Oklo, which is focused on developing advanced fission power plants, particularly to support the energy-intensive needs of artificial intelligence and data centers.

“This is how thematically how we got there and then tried to find the best of the best of breed and the leaders in their space and then be able to access it for our investors,” Klein said.

He described OpenAI as a difficult company to access due to its capital structure.

“We wanted to own it because it [has been] the clear leader in what’s going on in AI. And they literally have an announcement every day of something like, ‘oh, my goodness, how did that happen?’ And we were able to buy it. … And I suspect OpenAI is going to be a trillion dollar company,” Klein said.

SuRo CEO Klein: An exciting time to be investing

SuRo also invested in Plaid, which he called “one of the best fintech companies out there.”

“We’re extremely excited with Plaid and it’s when you look at the fintech landscape, [in] which there’s a multitude of companies, this is clearly one of the best in the space,” Klein said.

The conversation turned to the subject of companies that don’t work.

“Our view is unless the company’s out of business, we don’t write it off,” Klein said. “We write it down to zero, but we don’t write it off. And we learned that lesson several years ago.

“We had a company that we had written down to zero and you could have easily just crystallized the loss,” he added, “but through negotiations with the company and other shareholders, we got a recovery that was actually a gain from our initial investment.”

Klein said the IPO market is clearly opening up.

“If the markets continue to stay firm, I believe the IPO market will remain open and we have several names in our portfolio that will probably go public in the next 12 to 18 months,” he said.

SuRo Capital’s stock is up 48% this year and have more than doubled (up nearly 118%) from this time in 2024. The company is scheduled to report second-quarter earnings on Aug. 6.

“This is clearly one of the most exciting periods to be on the investment side,” he said. “It’s exciting just to be watching all of this and the rate of change is amazing.”

“We’re very fortunate that we are right in the middle of it, and our ability to have to identify, have access and deploy capital against it is probably the most fun experience I’ve had in investing in almost 40 years.”