Exchange-traded funds (ETFs) focused on artificial intelligence are multiplying rapidly as asset managers tap into growing enthusiasm around AI. Despite uncertainty about which companies will lead the AI revolution, investors continue to flock to these funds. This year alone, over one-third of the two dozen AI-themed ETFs were launched, data from Morningstar reveals.
The latest entrants include a revamped cloud computing ETF now refocused on AI. Altogether, AI ETFs have attracted $4.5 billion in assets, narrowing the gap with the $5.5 billion nuclear power ETF sector and significantly surpassing cannabis-themed ETFs, which hold $1.37 billion.
AI ETFs’ popularity partly stems from the impressive gains seen by companies like Nvidia, which has surged over 200% this year, reinforcing investor confidence. BlackRock has been at the forefront, recently launching two actively managed AI ETFs designed to capture emerging opportunities, adding to its existing $630 million iShares Future AI & Tech ETF.
Meanwhile, major technology firms are pouring massive resources into AI, with BofA Securities estimating that spending from tech giants will reach $206 billion this year. Venture capital firms are also increasing funding for AI startups by 27% compared to last year.
While investing in AI ETFs doesn’t guarantee outperformance, firms like Amplify ETFs are readying themselves for long-term AI-driven growth, offering unique opportunities to capture value as the technology continues to evolve.