As we glance towards the investment landscape of 2025, experts are vocal about the transformative potential of artificial intelligence (AI). Jay Jacobs, the U.S. head of thematic and active ETFs at BlackRock, emphasizes that we are merely at the dawn of the AI adoption phase. In a recent conversation on CNBC’s “ETF Edge,” Jacobs highlighted that the growing reliance on AI solutions will necessitate significant infrastructure investments, particularly in the establishment of robust data centers.
These centers will serve as the backbone for processing and storing the grand volumes of data generated by AI applications. As organizations grapple with the implications of enhanced digitalization, securing this data becomes paramount. Jacobs points out, “As data increases in value, so does the need for strong cybersecurity measures.” Consequently, the investments focusing on cybersecurity firms in tandem with those servicing the AI landscape are poised to exhibit rapid revenue growth, indicating a strategic shift in investment thought patterns.
In the wider context of technology investment, Jacobs brings attention to an often-overlooked aspect: the physical infrastructure that supports the digital surge. Many investors focus solely on software and cloud solutions, unaware of the tangible components that facilitate these advancements. “There’s a misconception that technology operates solely in the abstract,” Jacobs asserts. He argues that powerful technology requires foundational elements—energy production, state-of-the-art data centers, chip manufacturing, and specialized real estate—leading to a ripple effect in the materials and energy sectors, particularly for metals such as copper.
This insight calls for an updated investment approach that recognizes both digital and physical assets as equally crucial to the technology ecosystem. Investors must diversify their portfolios beyond traditional mega-cap tech stocks to include semiconductors, data center companies, and innovative software providers who are at the forefront of this transition.
With the transformational changes spurred by AI, Jacobs highlights BlackRock’s investment offerings, such as the iShares Future AI & Tech ETF (ARTY) and the iShares AI Innovation and Tech Active ETF (BAI). These ETF options are designed to capitalize on the booming sectors of infrastructure and cybersecurity, providing investors a pathway to participate in this evolving market. To date, both ETFs have exhibited promising growth trajectories, affirming Jacobs’s predictions. The iShares Future AI & Tech ETF has risen approximately 13% this year, while the iShares AI Innovation and Tech Active ETF also mirrors this robust performance since its launch.
The investment outlook for 2025 suggests a strategic pivot towards infrastructure and cybersecurity roles within the broader AI ecosystem. As data becomes increasingly integral to organizational success, the need for both secure environments and the physical infrastructure to support these technologies will only grow, creating vast opportunities for informed investors willing to adapt their strategies.