Artificial Intelligence (AI) is one of the powerful mega forces reshaping the global economy. There are several ways to approach this theme for investors seeking exposure to AI.
We are at the dawn of an intelligence revolution, more profound than all past industrial revolutions.
The primary reasons that make AI a more enduring investment opportunity is when we compare to prior waves of technology via the PC, the smartphone, the internet, the cloud, those are all amazing productivity tools. AI however, represents something quite different. This is, akin to building intelligence. Manufacturing intelligence. And this is something that we've not seen before.
And in this regard, it has actually consolidated and captured the entire emphasis of the entire technology industry. So for the balance of this decade, I would suspect that AI will be the predominant driver of growth.
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AI-related ETFs aim to capture the broad impact of AI technologies, offering exposure to a cross-section of companies that could stand to benefit from AI advancements.
Historic infrastructure investment
AI's growth has been driving a historic capital expenditure cycle across the broader infrastructure of this technology, spanning many sectors and industries.1
Semiconductor revenue surge
The AI chip market could surge, reaching $1 trillion in revenue by 2030, providing a broad investment avenue for investors.2
Energy demand growth
Critical IT power capacity in the U.S. will need to triple from 2023 to 2027, and surge well beyond, to keep pace with rising demand driven by AI.3
The release of ChatGPT in late 2022 reignited global interest in AI, marking the beginning of a new era. The AI revolution is not merely about building new tools, it is about developing systems that think, reason, act, and adapt like humans.
AI models increase in performance with more compute and data. The number of parameters proxies the complexity and capability of AI models.
Source: BlackRock, August 31st, 2024. For illustrative purposes only. There is no guarantee that any forecasts made will come to pass.
Chart description: Line chart showing the growth in AI model complexity over time, measured by the number of parameters. It tracks models like GPT, GPT-2, GPT-3, and GPT-4, highlighting future models expected to reach trillions of parameters.
Investing in AI-related ETFs doesn't have to be complicated. iShares offers several ways to access the AI theme, from pure-play technology exposures to products targeting the broader AI ecosystem.
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1 BlackRock, "Thematic Mid-Year Update," June, 2024. Forward-looking estimates may not come to pass.
2 McKinsey & Company “The Semiconductor decade: a trillion-dollar industry” as of April 1, 2022. Net growth calculated based on total revenue of $590B in 2021, with a $125b growth in revenue of computing and data storage from 2021 to 2030, accounting for 25% total net growth of the global semi market at $475B. Forward-looking estimates may not come to pass.
3 Semianalysis, “AI Datacenter Energy Dilemma- Race for AI Data Center Space.” As of March 13, 2024. Forward-looking estimates may not come to pass.
4 BlackRock, "Thematic Mid-Year Update," June, 2024. Forward-looking estimates may not come to pass.
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