Stokes family joins James Packer as investor in AI medtech star

Media mogul Kerry Stokes and fellow billionaire James Packer will bankroll the AI ambitions of American technology entrepreneur Daniel Nadler.

Media mogul Kerry Stokes has joined forces with James Packer to bankroll an American technology entrepreneur using AI. Picture: Mare Nirme

Media mogul Kerry Stokes has joined forces with fellow billionaire James Packer to bankroll an American technology entrepreneur using artificial intelligence to build the world’s best database for organising and storing medical information.

Mr Stokes and his son Ryan have invested a multimillion-dollar sum in a company called OpenEvidence founded by a Canadian-born technology entrepreneur, artist, and poet Daniel Nadler, who has just achieved a $US1bn ($1.58bn) valuation.

The 41-year-old Mr Nadler boasts a PhD from Harvard, where he worked on new econometric and statistical approaches to modelling low probability, high impact events.

OpenEvidence is his second AI company. His first, Kensho Technologies, was sold for$US550m in 2018.

Mr Packer and Mr Stokes – the latter through his private company Australian Capital Equity or ACE – were the first external investors in the parent company of OpenEvidence, known as Xyla, in July 2022 via a capital raising that valued the firm at more than $US400m.

Mr Packer put $US10m into the raising, which was also backed by legendary investment banker Ken Moelis, who has long been close with the Australian billionaire.

Last month, OpenEvidence achieved unicorn status when US venture capital giant Sequoia Capital invested $US75m in a Series C raising, which valued the firm at $US1bn.

“He’s probably one of the smartest men I have ever met,” Mr Stokes told The Australian of Mr Nadler.

“The work he has done bringing on not just his own doctorate, but the number of doctors he has actually developed at Harvard, is impressive. He is not an isolationist. He is a team player who builds other people up around him. Apart from that, he is an international artist. His poetry is unbelievable.”

James Packer at his Beverly Hills home. Picture: Jeff Rayner/Coleman-Rayner

OpenEvidence has been described as a chatbot for physicians that helps them make better decisions at the point of care, and Mr Nadler claims it is now being used by 40 per cent of doctors in America.

Sequoia has said it was backing OpenEvidence because it offered a solution to doctors overwhelmed with growing caseloads and an explosion of medical knowledge.

The New England Journal of Medicine has become a key content partner, meaning clinicians using OpenEvidence can have access to content sourced from NEJM Group journals.

“Trust matters in medicine, and the fact that it’s trained on The New England Journal of Medicine, the fact that it’s built from the ground up for doctors, the result is a black-and-white difference in terms of accuracy,” Mr Nadler told CNBC at the time of the raising.

He believes OpenEvidence will help save 1 million lives in America over the next decade.

Mr Stokes said Mr Nadler was “first to the party in small numbers AI,” which is a different field to broader AI.

“One of the issues with AI is that it is everything to everything. Daniel made his model specifically about medical, and it has learned everything there is to learn about medicine. So much so that they actually had OpenEvidence take a medical exam, and it passed,” Mr Stokes said.

“I was very excited to be invited to join Daniel, because he had no trouble raising money. That was not a problem. Putting the right people around him was his objective, and he did that very successfully.”

Mr Stokes first met Mr Nadler two years ago in America through Mr Packer. The two Australian billionaires continue to have a close relationship.

“I was a bit sceptical at the time. I came back and talked with Ryan about it, and we decided to invest. James and I have been close for a long time. It is one of the few things we have done together in business,” Mr Stokes said.

“It was something I really wanted to be involved with. The reward from OpenEvidence is going to come over the next five years as it becomes even smarter and fulfils its potential to help doctors even more.”

Over the past two years, Mr Packer has transitioned from being a hands-on business operator to being a pure investor after selling his shareholding in casino giant Crown Resorts to private equity firm Blackstone.

He is rarely in Australia, splitting time on his super yacht in the Mediterranean Sea or the South Pacific with his homes in Aspen, Los Angeles, Cabo and his polo ranch outside Buenos Aires.

“I think it now suits James where he is at in life,” Mr Stokes said of his friend’s transition to being an investor.

“It leaves him free to pursue other things that may become even more valuable. James on his day is one of the smartest guys I have ever met.”

In 2018, Mr Stokes sensationally revealed his intervention in Mr Packer’s life two years earlier when he took interim control of his friend’s private company, Consolidated Press Holdings, including having a hand in stopping his wedding to pop star Mariah Carey.

Mr Packer and Mr Stokes had fallen out during the battle for control of pay television in Australia between 2005 and 2008, but they reconciled in September 2009 and have not looked back.

“It is fantastic,” Mr Stokes said of Mr Packer’s new-found success backing technology companies.

In addition to OpenEvidence, Mr Packer’s CPH now has holdings in chipmakers such as Nvidia and Taiwan Semiconductor Manufacturing Company, as well as Facebook-parent Meta and Spotify.

Their sharemarket success – despite more recent volatility, especially in the value of Nividia – has escalated Mr Packer’s wealth dramatically over the past year.

“Daniel’s advice to James has been super, super smart, and James finally has some people around him who are at a level where they can actually work with him to be very successful,” Mr Stokes said.