Key Points
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Core AI funds hold platform companies building and deploying AI, while spillover funds target semiconductors, data centers, cybersecurity, and power infrastructure.
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Expense ratios for thematic AI ETFs range from 0.35% to 0.75%, with passive index funds typically cheaper than actively managed alternatives.
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Building exposure beyond core AI requires considering concentration risk in semiconductor funds and rate sensitivity in data center REITs.
Artificial intelligence (AI) creates investment opportunities across multiple layers, from the software platforms to the chips running them and the data centers housing the hardware. Exchange-traded funds (ETFs) offer diversified exposure to these segments without requiring individual stock selection, but the category spans everything from broad AI platform funds to narrow infrastructure plays in nuclear power and quantum computing.
Two approaches dominate AI ETF construction. Core funds hold the companies directly building and deploying AI – cloud providers, software platforms, and chip designers. Spillover funds target the picks-and-shovels businesses enabling AI deployment: semiconductor manufacturers, data center landlords, cybersecurity providers, and power infrastructure. The right mix depends on whether you want concentrated exposure to AI winners or broader participation in the infrastructure buildout.
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Here is a brief overview of the best ETFs covering this powerful theme.
Core AI ETFs
Global X Artificial Intelligence & Technology ETF (NASDAQ: AIQ) tracks the Indxx AI & Big Data index, providing broad global exposure across software, cloud, and mega-cap AI platforms. The passive fund carries a 0.68% expense ratio with approximately $6 billion in assets, offering diversified core exposure without overemphasizing any single AI category.
iShares Future AI & Tech ETF (NYSEMKT: ARTY) delivers similar core AI exposure from BlackRock at a lower 0.47% expense ratio. The passive fund tilts toward established technology names with fundamental screening, providing cost-conscious access to the same opportunity set as the Global X Artificial Intelligence & Technology ETF.
Roundhill Generative AI & Technology ETF (NYSEMKT: CHAT) takes an active management approach with concentrated positions in generative AI names. Launched in May 2023 with a 0.75% expense ratio, it offers options trading and suits investors wanting narrative-driven stock selection over index construction.
Semiconductor infrastructure
iShares Semiconductor ETF (NASDAQ: SOXX) and VanEck Semiconductor ETF (NASDAQ: SMH) both provide liquid exposure to chipmakers and equipment manufacturers. The iShares Semiconductor fund carries a 0.34% expense ratio while VanEck charges 0.35%.
The VanEck Semiconductor ETF concentrates heavily in its top 10 holdings – typically exceeding 70% of assets–with significant weights in Nvidia, TSMC, Broadcom, and ASML. The iShares Semiconductor ETF offers slightly broader diversification. Both are passive index funds capturing the profit engine of AI training and inference cycles.
Cybersecurity exposure
First Trust NASDAQ Cybersecurity ETF (NASDAQ: CIBR) applies rules-based screening to cyber names at a 0.59% expense ratio, while Amplify Cybersecurity ETF (NYSEMKT: HACK) tracks the NASDAQ ISE Cyber Security Select Index at a 0.60% expense ratio. Both are passive funds addressing the structural budget increases for AI-era attack surfaces and automated defense. The holdings overlap significantly but construction differences create modest performance divergence.
Data center infrastructure
Pacer Data & Infrastructure Real Estate ETF (NYSEMKT: SRVR) holds data center REITs and digital infrastructure operators through a rules-based Solactive index. Global X Data Center & Digital Infrastructure ETF (NASDAQ: DTCR) provides more direct data center and interconnect exposure at a 0.50% expense ratio. Both are passive funds targeting the landlord layer–racks, fiber, and powered shells. As REIT-focused funds, these ETFs carry rate sensitivity that can pressure valuations when yields rise even as fundamentals improve.
Nuclear and uranium
VanEck Uranium and Nuclear ETF (NYSEMKT: NLR) diversifies across nuclear operators, equipment manufacturers, and uranium exposure at a 0.56% expense ratio. Sprott Uranium Miners ETF (NYSEMKT: URNM), as the name implies, invests mainly in uranium miners, with a 0.75% expense ratio. Both are passive funds capturing the power infrastructure thesis.
Quantum computing
Defiance Quantum ETF (NASDAQ: QTUM) indexes quantum-adjacent computing and machine learning names at a 0.40% expense ratio. The passive fund captures exposure to companies working on quantum hardware, software, and enabling technologies as the field moves from research labs toward commercial applications. Quantum computing remains highly speculative with long development timelines, but recent advances in error correction and qubit stability suggest the technology may be approaching practical utility for specific AI and optimization problems.
The portfolio construction trade-off
One fund keeps it simple. Choose Global X Artificial Intelligence & Technology ETF for breadth or iShares Future AI & Tech ETF for lower fees. Pick the Roundhill Generative AI & Technology ETF if you prefer active concentration over indexing.
To own the full infrastructure stack supporting advanced compute, add satellites around a core holding: iShares Semiconductor ETF or VanEck Semiconductor ETF for chips, First Trust NASDAQ Cybersecurity ETF or Amplify Cybersecurity ETF for defense, Pacer Data & Infrastructure Real Estate ETF or Global X Data Center & Digital Infrastructure ETF for racks and interconnect, and VanEck Uranium and Nuclear Energy ETF or Sprott Uranium Miners ETF for power. If you want a small speculative sleeve, add Defiance Quantum ETF.
This structure captures AI’s buildout across chips, racks, fiber, and kilowatts while the core holds the model builders and platforms.
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George Budwell has positions in BlackRock, Nvidia, and Taiwan Semiconductor Manufacturing. The Motley Fool has positions in and recommends ASML, Nvidia, Taiwan Semiconductor Manufacturing, and iShares Trust-iShares Semiconductor ETF. The Motley Fool recommends BlackRock and Broadcom. The Motley Fool has a disclosure policy.