9/20/2023 0 Comments Place to write![]() ![]() Microsoft owns a stake in OpenAI, its Bing search engine now incorporates ChatGPT, and it is working with Nvidia to build an AI supercomputer. Microsoft ( NASDAQ:MSFT) isn’t far behind, with a 7.6% weighting. Nvidia is a fairly large position, accounting for 7.9% of the fund. You probably won’t be surprised to find out that CHAT’s top holding is Nvidia ( NASDAQ:NVDA), the semiconductor giant whose chips power many generative AI solutions today. The ETF currently holds 32 positions, and its top 10 positions account for 56.9% of holdings. CHAT covers many of these companies by investing across several different areas that are relevant to generative AI - software, cloud infrastructure, semiconductors, network infrastructure, and services. While OpenAI, the company behind high-profile AI products like ChatGPT and Dall-E, is private, there are plenty of ways to invest in publicly-traded companies with generative AI offerings. The AI Investment UniverseĬlearly, there is plenty of economic opportunity ahead of companies with generative AI applications. ![]() Meanwhile, Goldman Sachs ( NYSE:GS) believes that AI has the potential to create approximately $7 trillion in economic growth worldwide over the course of the next decade. Roundhill believes that the current total addressable market for AI enterprise software is about $120 billion. The good news is that generative AI does not disappoint in this area, either. While these are incredible advances, smart investors know that technologies need to make a financial impact as well in order to become good investments. ChatGPT launched in November 2022 and reached 100 million users just two months later, becoming the fastest-growing application of all time, according to Bloomberg. The speed at which this new technology has been adopted is unprecedented. The examples of what generative AI can currently do are impressive - just a few years ago, it would have been hard to believe that technology available to the masses would be able to write term papers for students, pass the bar exam, or create images and video based on text-based prompts. This differs from traditional AI in that it has “the ability to create new, unique content rather than just analyzing or processing existing information.” Why Invest in Generative AI? ![]() (The ETF’s ticker, CHAT, is clearly a nod to this model). Another example would be using OpenAI’s Dall-E 2 generator and having it create a work of art for you based on the prompts you give it. What is Generative AI?Īs described by Roundhill, generative AI is AI that is “capable of creating new, unique content by learning patterns and structures from existing data.” For example, going on ChatGPT and asking it to write a poem or to create a screenplay based on some criteria that you give it is an example of generative AI in action. Let’s take a look at what generative AI is, how CHAT invests in it, and evaluate CHAT as an investment opportunity. While there are plenty of general AI-themed ETFs out there, this is the first ETF that specifically invests in companies advancing generative AI. An old adage says to make hay while the sun is shining, and with interest in generative AI surging thanks to the likes of OpenAI’s ChatGPT and Google’s Bard AI, Roundhill Investments did just that by launching the world’s first ETF specifically focused on generative AI last week - the Roundhill Generative AI & Technology ETF ( NYSEARCA:CHAT). ![]()
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