New Mexico fund backs Lightspeed AI

The New Mexico State Investment Council approved a $120 million commitment to Lightspeed, a Silicon Valley venture capital firm, on Tuesday. The allocation includes $100 million for the Lightspeed AI Renaissance Fund and $20 million for a related co-investment vehicle. Activist groups objected to the move, arguing it would increase the state fund's exposure to companies owned by tech billionaire Elon Musk.

State Investment Officer Jon Clark stated that the specific funds targeted by the council are not linked to Musk. The AI Renaissance Fund has not yet begun its investment period. Its strategy focuses on acquiring established companies in the service sector and streamlining their operations using artificial intelligence. Clark noted that while other Lightspeed funds have invested in xAI and Neuralink, this new commitment operates under a separate strategy.

The council approved a total of $1.07 billion in new investments on Tuesday. The board also established a relationship with Arcmont Asset Management, placing $150 million in the Arcmont Capital Solutions Fund III, a European private debt fund. An additional $100 million was directed to the Advent Mid-Market Private Equity SCSP. This fund focuses on buyouts of European and North American firms in consumer, healthcare, industrial, and business services sectors. The state has previously committed to four other Advent funds.

The council also renewed commitments to three existing funds. The state will invest $225 million in the Copenhagen Infrastructure Fund VI, which supports renewable energy development, and $125 million in a related co-investment vehicle. A further $200 million will go to the EQT Exeter Industrial Value Fund VII, which targets logistics and light industry. The largest single commitment is $400 million for the FPA Blue Chip Secure Value Fund VII, which focuses on multifamily housing.

Elaine Cimino, leader of the activist group Common Ground Rising, dismissed the specific details of the commitment. "The problem is Lightspeed," she said. Her group, Concerned Citizens for Nuclear Safety, also cited Lightspeed’s backing of Castelion Corp. Castelion is building a 1,000-acre solid rocket motor manufacturing site in Sandoval County. Clark maintained that the new investment has no tie to Castelion, noting that many managers run multiple strategies through separate funds.

Isaac Kim, a Lightspeed partner, told the council that the AI Renaissance Fund has already raised more than $750 million, exceeding its initial target. The firm, founded in 2000, manages more than $50 billion in assets. Lightspeed was the largest investor in Anthropic’s $3.5 billion Series E financing round and has backed Anduril, Grubhub, and Snap Inc. Charles Wollman, a spokesperson for the council, wrote that the state is contractually prohibited from sharing details about individual investors’ portfolios.

The sovereign wealth fund, established in 1958, invests revenue from New Mexico’s taxes on oil and gas production and leases of public land. When Clark took the helm three years ago, the fund held less than $50 billion in assets. It is now worth $75.8 billion. Clark said the fund has lagged behind its goals for private market investments, which require more vetting and longer negotiations compared to public equities and bonds.

Returns from the fund play a growing role in the state budget. New Mexico’s crude oil production is booming, and gas prices spiked during the war in Iran. The fund is expected to generate $2.3 billion in distributions in fiscal year 2027. Clark projected that by 2050, the fund will supply 37% of the state’s general fund revenue. That figure exceeds all corporate and personal income tax combined, as well as all sales taxes.