The trading platform Robinhood is preparing to open access for small investors to private artificial intelligence companies, according to remarks Vlad Tenev made in an interview with the Financial Times.
Vlad said he wants “normal people” to have a chance to invest in private AI firms whose valuations have surged.
He said AI will cause “widescale disruption” and that retail traders should be able to participate in whatever comes out of that change, rather than being locked out while large institutions collect the gains.
The plan involves a new fund managed by Robinhood’s subsidiary, Robinhood Ventures, which will invest in a concentrated group of at least five private AI start-ups considered “best in class.”
Vlad said the fund may use borrowed money to potentially increase returns. This comes at a moment when private markets are attracting more interest from smaller investors, while traditional public markets have steadily shrunk.
Fund access shifts toward smaller investors
Asset managers across the country are actively targeting individuals because the pool of institutional money is no longer the only main source they want.
A recent executive order signed by President Donald Trump in August made it easier for employers to include private equity and private credit in retirement savings plans.
This has encouraged firms such as Blue Owl, Blackstone and Apollo to expand beyond their usual large-scale clients and approach everyday investors.
Public markets have been shrinking for decades. At the same time, private markets have ballooned. In 2016, only 20 private companies in the United States were valued at more than $1 billion.
By 2024, that number jumped to more than 1,000. Major AI developers like OpenAI and Anthropic have driven much of this growth.
Over just the past year, ten unprofitable AI start-ups added nearly $1 trillion to their combined valuations through private funding rounds.
The new fund from Robinhood is closed-end, which means investors cannot freely redeem shares at any time. If many people try to exit at once, they may not be able to get their money.
Bryan Armour, who is director of passive strategies research at Morningstar, said, “Managing a complex, private equity strategy like this could seriously burn their fast-moving user base.”
His concern is that many users of the platform tend to trade quickly and may not adjust well to money being locked up.
High risk appetite and expanding features
Vlad said retail traders are already familiar with taking risks and that many of them are aware that investments in early-stage private companies could go all the way down to zero.
He said users are “buying heavily” into AI-related themes and that he does not believe valuations of large tech giants are excessively inflated.
Vlad became widely recognized during the 2021 meme-stock cycle due to Robinhood’s popularity among highly active traders who were willing to take bold bets.
Shares of Robinhood have risen around 255 percent this year, making it one of the strongest performers in the S&P 500.
Despite that run, the stock fell almost 11 percent on Thursday after the company reported third-quarter revenue of $1.27 billion, which was double what it reported a year ago. Income from crypto trading increased sharply, rising 300 percent to $268 million.
Earlier this year, Robinhood partnered with Kalshi to offer prediction markets where users can trade on binary outcomes tied to sports, politics or entertainment.
The company reported that the number of event contracts traded on the platform rose to 2.3 billion between July and September, and then to 2.5 billion in October. Vlad said this type of market could expand further and become more personalized.
He said that if traders could price the risk of a house being damaged by a flood or fire, it could lead to a product that functions differently than traditional insurance and may appeal to many users.
