Minneapolis' Gene Munster gained a national reputation as a tech industry analyst as an early Apple hawk. He's a regular guest on CNBC and other national outlets.
Minneapolis' Gene Munster — who gained fame predicting Apple's growth — now hot on 'frontier tech'
His firm, Deepwater Asset Management, now has more than $250 million in assets under management. He sat down to talk about tech investments.
August 10, 2023 at 5:12PM
After 21 years with Piper Sandler, in 2017 he launched investment firm Deepwater Asset Management, originally Loup Ventures. Deepwater now has more than $250 million in assets under management invested in both public and private growth companies through a series of funds and an ETF (exchange-traded fund).
Munster watches tech trends closely and wants to invest ahead of the curve in what he calls "frontier tech." He's optimistic about the future of artificial intelligence, for example, but acknowledges that it could pose a threat to his own profession.
"From a markets perspective if AI cracks the markets there's really no need for asset managers," Munster said.
Munster sat down in his Uptown office last month to talk about what's ahead for tech. The following has been edited for length and clarity
Q: You predicted in 2018 Amazon might buy Target. That obviously hasn't happened, but could a deal still make sense even though you are no longer predicting the match?
A: Ultimately I feel that Amazon wants to do more with groceries, and they also want to do more around logistics. I think that the Target piece still lines up with them. I think it's an important customer base that lines up with the demographics of Prime.
Long term, I think it does line up. I think there is enough synergy between the two that it makes sense.
Q: Minnesota has a reputation for med tech but not tech tech. Why?
A: It's been a disappointment. There's nothing on the startup scene that really jumps out to us.
I think it's a culture question. Tech founders have a swagger to them that is just not part of Minnesota Nice. I think a lot of the institutional money, especially with the startups, they heavily make the decision based on the founder. They want to see this type of a personality.
For the startup tech scene to become vibrant here we need two or three big outcomes.
Q: What are you investing in?
A: We invest in frontier tech: the areas that are going to have transformative impact on the way we learn, work and play. Frontier tech is what we're going to be talking about in three to five years.
When we launched in 2017, we had a manifesto and we laid out our frontier tech themes and they were topics like augmented reality, electric cars, autonomy, artificial intelligence. It takes years for these to get into the mainstream.
Q: How is AI going to show up in people's lives?
A: There's many smart people who think it's the end of humanity. I think humans are going to be in a better place because of artificial intelligence.
There will be some bad parts to it. The biggest bad part that people should be "eyes open" to is what it's going to mean to disinformation and truth. That's going to be a problem. It can have a cultural impact on how humans interact with each other. I think social unrest is a byproduct of disinformation.
Someone who's just an average person — doesn't work in tech, doesn't have an information worker job — it impacts how search [engine] results are delivered, what you're seeing in TikTok and Instagram feeds, how fast your packages get to your house. They're not things that you see today but whether you realize it or not your search results today are better than they were two years ago because of AI.
Q: How can companies deploy AI?
A: We have invested in some brain tech companies, some of these are related to implants. AI is being used to help better interpret data from these. Medtronic is one of the customers to one of these companies. The company's not based in Minneapolis.
How Medtronic interprets data from their devices, everything from a pacemaker to a brain implant, the insights that are going to be drawn from that are going to have an impact in terms of how these devices are implemented, how they are developed and how clinicians can take that data and put it more to good use.
Q: You had a demo of Vision Pro, Apple's mixed-reality headset?
A: It changed how I thought about ways that we could interact with computers. It is no longer about a screen but the space around you becomes part of the computing experience.
You look like you're looking at the real world but then you can do things that are outside of the real world. You can interact with digital objects. I thought the potential here is massive.
Q: Why are you here instead of New York or Silicon Valley?
A: I think Minneapolis has incredible talent and it's just really hard-working. The way we describe it is, "We know the Valley but we're not in the Valley." There is an advantage here.
There's kind of this circular echo chamber that goes on in areas like Austin, Texas, and Silicon Valley that I think can get to groupthink. It's the reason why Theranos happened, the idea that enough smart people are involved with something, therefore it has to work.
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