CNBC's Robert Frank joins 'Squawk Box' with a look at where some of America's wealthiest individuals are putting their money.

Recent data shows that America's wealthiest individuals, particularly through family offices, are prioritizing investments in artificial intelligence, biotechnology, and energy sectors. Although the number of direct deals by family offices and startups has dropped by 46 percent compared to the previous year, significant investments continue in these fields, led by tech billionaires like Peter Thiel, Michael Dell, Jeff Bezos, and Eric Schmidt.

The decline in deal volume is attributed to the dominance of large AI companies attracting the majority of available capital. Family offices are increasingly debating the value of private versus public investments, with many shifting toward public equities due to better returns and liquidity. Discussions also highlight concerns over private equity fees and the changing landscape of alternative investments.

Billionaires bet on AI, biotech: Here's what to know

Right now, for a read on where some of America's wealthiest individuals are putting their money, we are joined by Robert Frank. Robert, good morning. Morning, Becky. Always good to see you. Good to see all of you. For family offices, deals in the third quarter were all about AI, biotech, and energy. Direct deals by family offices and startups fell 46 percent in the third quarter. That compares to a year ago. That's according to exclusive data from Fintrex. Now, there were only 169 investments recorded by family offices in the quarter. The tech billionaires, well, they're leading the way. Peter Thiel's family office made seven investments in the quarter. He was part of a $100 million funding round for Descartes. That's an Israeli AI firm that was founded just two years ago, now valued at $3 billion. He also invested in a German drone maker, a gene therapy startup, and a company called Varda Space, which is working to develop medicines in orbit in space. Michael Dell's family office invested in the Austin-based Harbor Health. That's a clinic and health insurance company. And Jeff Bezos and Eric Schmidt both invested alongside NVIDIA in the $300 million seed round of a company called Periodic Labs. They aim to create an AI scientist that are going to run robot labs to create new materials. So fascinating company there. For more on the family office news, including highlights from our latest family office roundtable dinner last week, you can sign up for the Inside Wealth newsletter coming out tomorrow at cnbc.com slash inside wealth at cnbc.com slash inside wealth. Robert, I have to say, I'm not shocked that AI plays such a big role or biotech. These are family offices, I guess, that they're always on the bleeding edge of things, always finding the hottest, latest, greatest. Yeah. And I think the reason that deals are down is because the mega cap AI private companies like OpenAI, Anthropic, XAI are just sucking the oxygen out of the room with capital. So there are fewer deals, but more money chasing these mega cap AI companies. And so that's why I think one of the reasons you're seeing a decline deals, 80 percent or so of family offices say that AI is their top investment theme. So that's where all the money is going right now. What was the biggest surprise you had at this roundtable dinner? What was the biggest takeaway? There was a huge discussion over private versus public and whether you're actually getting paid these days for illiquidity. The idea for family offices was you're getting higher returns and less volatility by keeping your money in these alternatives. Now those returns have come down. So is that really worth the tradeoff? Is that why we see this push for alternatives to the retail investor? It's certainly one of the reasons is because family offices and institutions, they're not putting more money into private equity because they're not getting the cash out. And so these private equity firms, private capital, they need to go out and raise funds from other groups. So that's certainly one of the reasons. But there was a huge debate about that and also about fees. The two and 20, a lot of family offices were saying, why should you pay a two percent management fee? It makes no sense. And there was a big debate about that too. So again, this whole intersection of private versus public markets and a lot of family offices now are putting more money into public equities because the returns are very good and you get liquidity.

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