What the 10 AI-Themed ETFs Have in Common

Lesser known investments are found in companies that operate in oil and gas

Artificial intelligence has dominated the news cycle since the public debut of ChatGPT on November 30, 2022. Since then, many businesses and publicly-traded companies have publicly announced or aligned themselves as pro-AI or already-using AI in their current business to gain the acceptance of the public. But just how far and wide does AI go in the economy?

We analyzed 10 ETFs totaling USD 12.45 billion, and here are the trends we discovered. 

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AI goes hand-in-hand with robotics and automation

According to Fortune Business Insights, the artificial intelligence market was valued at $328B in 2021 and is projected to grow from $387B in 2022 to $1.4T by 2029. Regarding investments in AI, thematic ETFs are an intelligent place to survey what lies ahead. The most sizable AI-themed ETF is led by Cathie Wood's ARK Innovation ETF ARKK 0.00%↑, with a staggering $7.4B in net assets in their fund.

AI-themed ETFs go hand-in-hand with other advanced technologies like robotics and automation. As such, sectors like semiconductors, machinery, software, and IT services carry the upper hand when obtaining financial capital.

A non-popular view about AI is most people will never see or touch it because companies deploy AI as a tool rather than a product, like ChatGPT. Companies that offer consumer products or services in household durables, energy, consumer finance, and transportation have the smallest piece (less than 3%) of the investment pie from ETFs.

Assessing the portfolio holdings of the ten AI-themed ETFs, a handful of mega to large-cap companies are featured as receiving the bulk of investment capital. Nvidia NVDA 0.00%↑, Tesla TSLA 0.00%↑, Intuitive Surgical ISRG 0.00%↑, Keyence (KYCCF), and Cadence Design Systems CDNS 0.00%↑ are frequently the top holdings in these AI-themed ETFs.

Lesser known investments are found in companies that operate in oil, gas, consumable fuels, life sciences, and aerospace and defense.