Artificial intelligence (AI) is one of the most disruptive forces of our time. From self-driving cars to generative AI tools like ChatGPT, the industry is expanding at lightning speed. According to McKinsey, AI adoption could add $ 4.4 trillion in annual value to the global economy, making it one of the most lucrative sectors of the decade. But here’s the problem: most of the most exciting AI startups—those building groundbreaking models or niche applications—are private companies. Unless you’re a venture capitalist or a high-net-worth investor with access to early funding rounds, you’re locked out.
So, how do regular investors keep up with the AI boom without access to private equity? The answer lies in the public stock market, where many listed companies are not only participating in the AI revolution but shaping it.
Public Companies at the Center of the AI Race
You don’t need a ticket to a private funding round to gain exposure to AI. Major public companies are already pouring billions into AI infrastructure and applications:
- NVIDIA, for instance, dominates the hardware powering AI systems. Its GPUs are the backbone of machine learning, and in 2023 its revenue jumped 126% year-over-year, largely due to AI demand.
- Microsoft invested over $ 10 billion in OpenAI, making it one of the most prominent public-facing plays in AI, with integrations of AI tools directly into products like Office and Azure.
- Alphabet (Google) continues to develop its own models, including Bard and DeepMind projects, while also deploying AI across search, advertising, and cloud services.
Investing in these giants doesn’t just give exposure to AI; it also provides diversification since these companies have established revenue streams beyond experimental technology.
ETFs: An Easy Way to Capture AI Growth
For investors who don’t want to pick individual stocks, AI-focused exchange-traded funds (ETFs) are a smart alternative. Funds like the Global X Robotics & Artificial Intelligence ETF (BOTZ) or the iShares Robotics and Artificial Intelligence ETF (IRBO) hold dozens of companies involved in AI hardware, software, and robotics. These funds grew assets significantly over the past three years as interest in AI soared.
ETFs spread out risk, which is particularly useful in a sector as dynamic and competitive as AI. While one company may falter, another may take the lead—and the fund balances that exposure.
The Risk Factor: Don’t Buy Into the Hype Blindly
Of course, investing in AI stocks through the public market isn’t without risks. Many AI-related companies are trading at high valuations. For example, NVIDIA’s price-to-earnings ratio peaked above 100 in 2023, which signals that much of the growth expectation is already priced in. If adoption slows or regulation tightens—especially around data privacy or AI safety—stock prices could correct sharply.
Another key risk is winner-takes-all dynamics. Not every AI company will become a global leader. Some will be outpaced by better-funded or more innovative competitors. That’s why diversification—through ETFs or a balanced portfolio—remains essential.
Staying Ahead in the AI Era
If you feel left behind because you can’t invest in AI startups directly, remember that public markets already give you plenty of tools to participate. By focusing on listed companies at the forefront of AI, or by diversifying through ETFs, you can still ride the wave of this technological revolution. The trick is not to chase hype but to understand where value is truly being created and to position your investments with patience.
AI will be a marathon, not a sprint. And just as the internet reshaped investing in the 1990s, today’s public companies in AI could deliver outsized returns over the next decade for those who position themselves wisely.
