Blackrock broadens AI investment opportunities with ETF launch

Blackrock has launched two AI-focused Exhange Traded Funds (ETF) as it seeks to provide its clients with more investment opportunities in AI and technology.

The iShares AI Innovation and Tech Active (BAI) ETF eyes investment opportunities in companies that specialise in AI infrastructure, intelligence and applications, including AI power, accelerated computing, cloud infrastructure, AI models, data software and tools.

The iShares Technology Opportunities Active (TEK) ETF seeks to build a selected portfolio of between 50 and 70 global technology companies across the semiconductor, software, hardware, internet, services, content and infrastructure industries, as well as new sectors.

Blackrock, which is the largest asset manager in the world with over $10 trillion in assets, said that the long-term impacts of the AI revolution “will be profound,” describing the technology “as a mega force” that could provide investors with opportunities for significant growth.

“We are at the dawn of an intelligence revolution,” said Tony Kim, head of the fundamental equities global technology team, Blackrock. “These active ETFs can help investors seize outsized and overlooked investment opportunities across the full stack of AI and advanced technologies.”

Distributed by BlackRock Investments, the iShares Funds consist of a line-up of over 1,400 funds and $4.2 trillion in assets under management as of 30 September 2024.

Both BAI and TEK are ETF wrappers are managed by Tony Kim and portfolio manager and managing director within the same team Reid Menge.

In August, the two directors published a document claiming that AI is “only at the tip of the iceberg” in terms of investment opportunities.

They added that the current monetisation of AI lies primarily in the creation of AI “factories,” with hyperscalers, private enterprises, and government entities pouring “hundreds of billions of dollars” into the construction of these data centres.

“The asset management industry has reached an inflection point as active ETFs become the next frontier in investment innovation,” added Rachel Aguirre, head of US iShares product at BlackRock. “Today’s launches expand BlackRock’s active ETF platform to more investors, enabling our clients to harness the long-term potential of AI and technology within the convenience of an ETF.”