Skip to main content
Financial Fundamentals

How to Invest in Artificial Intelligence (AI) - The Future of AI

— Alexandra Ardelean

How to Invest in Artificial Intelligence (AI) - The Future of AI

Hey everyone, my name is Marco and I host a show called Whiteboard Finance. Today we're going to talk about how to invest in artificial intelligence.

Artificial intelligence is the simulation of human intelligence processes by machines, especially computer systems. AI has the potential to disrupt and shape entire industries, changing how we live, work, and entertain ourselves.

There are four types of AI:

  1. Reactive AI: This refers to basic artificial intelligence that lacks the ability to learn from past actions. An illustrative example is email spam filtering systems.

  2. Limited Memory: This type can learn from experience and pre-programmed information. An example is autonomous vehicles.

  3. Theory of Mind: This type has advanced decision-making abilities and can understand and adapt to emotions.

  4. Self-Awareness: This is the most sophisticated form, aware of its own emotions and those of others. An example is the movie Ex Machina.

There are different investment strategies for disruptive technologies like AI. You can invest in the developers of the technology or companies that benefit from wider adoption.

Three common ways to invest in AI are through ETFs, individual stocks, or startups/pre-IPO companies.

  • ETFs and Mutual Funds: These are a good way to get diversified exposure to the AI sector without picking individual stocks. Some examples include:

    • iShares Exponential Technologies ETF (XT): This fund provides exposure to companies that could benefit from technological innovation.

    • Robo Global Robotics and Automation Index (ROBO): This fund focuses on robotics, automation, and artificial intelligence companies.

    • Global X's Robotics and Artificial Intelligence ETF (BOTZ): This fund provides exposure to companies involved in the development and use of robotics and AI.

  • Individual Stocks: You can also invest in individual stocks of companies that are leaders in the AI space, such as:

    • Tesla: Known for its electric vehicles, Tesla also has a strong focus on AI and autonomous driving technology.

    • NVIDIA: A leading provider of graphics processing units (GPUs) used in AI applications.

    • Microsoft: The company has been investing heavily in AI research and development.

    • Taiwan Semiconductor Manufacturing (TSM): A key provider for many companies in the AI hardware sector.

  • Startups and Pre-IPO Companies: Investing in startups or pre-IPO companies can be high risk but offer high rewards if successful. You can do this through platforms like Fundrise's venture product, which offers access to private and pre-IPO companies.

I personally invest with Fundrise using a barbell approach to investing. I have a portion of my portfolio in low-cost index funds for stability, while I allocate a smaller portion to higher-risk investments like startups for potential growth.

The potential pros of investing in AI include its disruptive nature with expected economic value growth. However, picking winning AI investments is challenging, as the market may be overvalued due to hype. Successful stocks in the AI revolution could see large gains, but there's uncertainty around regulations and ethical considerations.

If you want to learn more about how I invest with Fundrise using a barbell approach, check out my video on how I invest my money as an entrepreneur. If you want to learn more about how I invest with Fundrise using a barbell approach, check out my video on how I invest my money as an entrepreneur.

Thank you for reading!