BlackRock Bets Big on AI with New Thematic ETFs

Investment management giant BlackRock launched two new exchange-traded funds (ETFs) on Tuesday, aiming to provide investors access to the rapidly expanding artificial intelligence market. These funds are a strategic bid to tap into the global appeal of generative AI, which seeks to emulate human-like interactions through vast data processing and is expected to integrate across industries ranging from technology to financial services in the coming years.

BlackRock emphasized its belief in AI as a transformative force with significant investment implications both now and for the foreseeable future. Unlike traditional products tracking broad market indices, asset managers are increasingly offering thematic ETFs to capitalize on the popularity of specific themes, sectors, or trends. However, recent months have seen mixed demand for such products, as many investors favor funds linked to stock market benchmarks hovering near historical highs.

The newly launched iShares A.I. Innovation and Tech Active ETF will invest in global AI and tech stocks across various market capitalizations. Similarly, the iShares Technology Opportunities Active ETF aims for long-term capital appreciation by investing in global tech companies across sectors such as semiconductors, software, and hardware.

Tony Kim, Head of BlackRock's Fundamental Equities Technology division, stated that these active ETFs can assist investors in identifying overlooked investment opportunities within the AI and advanced technology sphere.

Earlier this month, BlackRock’s third-quarter profits surpassed expectations, buoyed by a rebound in U.S. stock markets that drove capital inflows. By September 30, BlackRock’s iShares business, encompassing over 1,400 ETFs, boasted assets under management totaling $4.2 trillion.