When discussing progress made in AI technology so far, a common phrase stated one way or another is “We’re in the early innings." Baseball references aside, it is largely thought that the buildup of AI infrastructure is part of the first stage of this new technology. In 2022, ChatGPT showed how useful large language models (LLMs) can be. This sparked big investments over the following years. Four hyperscaler firms will invest over $300 billion in AI infrastructure in 2025.
However, AI infrastructure won’t have a fully revolutionary impact on society in a vacuum. To do this, the world will need revolutionary AI applications, particularly software. Many see this as the next phase of AI. This brings up an interesting fund, the iShares Expanded Tech-Software Sector ETF (BATS: IGV). It holds many software companies that are developing AI products. So, does this ETF offer a strong way to play the next phase of AI while reducing company-specific risk?
