As robots and artificial intelligence (AI) become ever more prevalent in our daily lives, the impact of this trend has been further amplified due to the pandemic lockdowns. Not only is the technology becoming more accessible, it has also become a more lucrative sector as the costs propelling its adoption declines. Grand View Research estimates the global artificial intelligence market was worth $136.55 billion in 2022 and is forecasted to have a Compound Annual Growth Rate (CAGR) of 37.3% between 2023-2030. ChatGPT, an AI-driven chatbot developed by OpenAI, garnered considerable interest during its public debut in November 2022.
Microsoft MSFT has been investing heavily in OpenAI, releasing an AI-enabled version of Bing search and Edge browser. Microsoft’s CEO, Satya Nadella, bragged that AI has been the “biggest thing” to happen at the business since his takeover nine years prior. By claiming the technology, Microsoft has aimed to integrate AI into its Bing search engine, Microsoft 365 bundle, GitHub, Azure cloud and sales & marketing software.
When Microsoft first endorsed a $1 billion investment to OpenAI in 2019, the move was questioned by many. Later in November 2022 when OpenAI launched their chatbot ChatGPT, the buzz was unanimous due to the bot’s capability to dialogue on a variety of contested topics in a human manner. As a result, Microsoft’s financial commitment to OpenAI had surged to over $13 billion, locating its valuation at approximately $29 billion. This immense success has naturally attracted several U.S. and Chinese companies in partaking of the ChatGPT surge, therefore mandating a large amount of data operations running over Microsoft’s cloud hosting.
In light of the scenario discussed, we highlight a few tech Exchange-Traded Funds (ETFs) which will likely gain from the contemporary ChatGPT hype. AI Powered Equity ETF (AIEQ) is an actively managed fund that utilizes Artificial Intelligence for stock picking as its primary approach. Holding a total of 140 stocks and with no single constituent occupying more than 8.38% of the fund, it has accrued $107.1 million in assets since its initiation. iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) is one of the most affordable products in the range, boasting a 47 bps fee and boasting $302.6 million in surged capital. Its equal-weighted index is engineered to tolerate no stock beyond 1.62%. Global X Cloud Computing Fund WCLD and Global X Cloud Computing ETF CLOU are also some of the ETFs that can capitalize on the situation. WCLD has accumulated $623.4 million in assets and charges 45 bps in fees while the second option, CLOU, is managed by an Indxx Global Cloud Computing Index and posses $554.0 million in property with 68 bps in fees.
Microsoft has surely become a leader in the AI sector recently, helmed by their investment in OpenAI, who’s ChatGPT made an immediate impression on multiple arenas. With the current market developing due to the rise in AI needs, ETFs such as AIEQ, IRBO, WCLD and CLOU are forecasted to benefit from the bet, through data operations running through Microsoft’s cloud servers..
