A new front has opened in the artificial intelligence (AI) arms race, and this time, it isn’t about which company has the most powerful technology.
Historically, companies like OpenAI and Anthropic have competed by spending heavily on graphics processing units (GPUs), leasing data centers and devoting countless hours to fine-tuning model performance. Billions of dollars have gone toward raw computational power and infrastructure.
But today, the race is paradoxically shifting toward the human element. Top AI talent has become the newest battleground, with leading firms offering unprecedented compensation packages to recruit the best and brightest minds.
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According to Fortune, compensation packages and signing bonuses can exceed $100 million for high-level talent. Social media and advertising giant Meta Platforms Inc. (ticker: META) allegedly keeps a “dream team” hiring list with input from CEO Mark Zuckerberg himself.
This is part of a broader trend in the AI industry’s current stage. As competition intensifies, Big Tech firms like Meta, Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN) and Alphabet Inc. (GOOG, GOOGL) are leveraging their deep cash reserves to poach engineers and researchers from up-and-coming startups.
These talent raids could become a make-or-break factor in whether emerging AI companies succeed or eventually get absorbed in a wave of consolidation.
All of this underscores why retail investors should think twice before betting on a single AI stock. Talent loss, acquisition risk and execution missteps can derail even the most promising ventures.
Instead, AI-themed exchange-traded funds (ETFs) can deliver similar growth prospects, but with far greater diversification.
“We’re in the early stages of the AI cycle, and proper diversification is extremely important — be it across company stages or geographies — because it’s difficult to pick a winner or two this early,” says Tejas Dessai, director of thematic research at Global X ETFs. “With a thematic exchange-traded fund, you’re following an idea as opposed to a complex strategy.”
Here are six of the best AI ETFs to buy now:
| ETF | Expense ratio |
| Invesco AI and Next Gen Software ETF (IGPT) | 0.58% |
| Xtrackers Artificial Intelligence and Big Data ETF (XAIX) | 0.35% |
| Global X Artificial Intelligence & Technology ETF (AIQ) | 0.68% |
| Roundhill Generative AI & Technology ETF (CHAT) | 0.75% |
| VistaShares Artificial Intelligence Supercycle ETF (AIS) | 0.75% |
| KraneShares Artificial Intelligence & Technology ETF (AGIX) | 1.00% |
Invesco AI and Next Gen Software ETF (IGPT)
“We believe AI remains a compelling long-term growth theme in the U.S., driven by innovation and rising enterprise adoption,” says Rene Reyna, head of thematic and specialty product ETF strategy at Invesco. “However, near-term sentiment is being weighed down by renewed tariff pressures, creating uncertainty for investors in the space.” IGPT offers diversification within the AI industry by holding 100 companies.
This ETF passively tracks the Stoxx World AC NexGen Software Development Index. “IGPT targets companies from across the globe that generate revenue from various forms of software and AI, such as data storage, robotics, autonomous vehicles, semiconductors and web platforms,” Reyna says. It charges a 0.58% expense ratio, which works out to around $58 a year in fees per $10,000 investment.
Xtrackers Artificial Intelligence and Big Data ETF (XAIX)
“Broadly speaking, capital expenditures for AI remain high. However, investors are increasingly scrutinizing the return on investment for these expenditures,” says Arne Noack, regional investment head of Xtrackers, Americas, at DWS Group. “In other words, it will be important to see how adoption of AI will accelerate growth, increase productivity or reduce costs across the economic value chain.”
XAIX tracks the Nasdaq Global Artificial Intelligence and Big Data Index, which uses a unique patent-based methodology. “Many of the existing funds in the market utilize backward-looking mechanisms to determine if a company should be classified as an AI company,” Noack explains. “On the other hand, XAIX’s underlying index screens for approved patents in fields related to AI.” The ETF charges 0.35%.
Global X Artificial Intelligence & Technology ETF (AIQ)
“When you think about smartphones, laptops or even mobile applications, lower prices and cheaper development costs didn’t shrink the market but expanded it as innovation accelerated,” Dessai explains. “AI could follow the same trajectory, embedding itself into the physical world — from factories and drones to delivery vans and buildings.” Global X’s flagship AI ETF is AIQ, at over $3.8 billion in assets.
This ETF tracks a basket of 86 companies represented by the Indxx Artificial Intelligence & Big Data Index. While some of the “Magnificent Seven” stocks like Microsoft and Meta are in AIQ’s top holdings, the ETF also includes international stocks. These include Chinese social media giant Tencent Holdings Ltd. (0700.HK) and Korean consumer electronics conglomerate Samsung Electronics Co. Ltd. (005930.KS).
[Read: 7 Best Tech ETFs to Buy in 2025]
Roundhill Generative AI & Technology ETF (CHAT)
“CHAT selects stocks using a proprietary methodology that combines a transcript score and sector score to evaluate companies’ relevance to generative AI, factoring in their revenue, profit and R&D investment in AI technologies,” explains Dave Mazza, CEO at Roundhill Investments. “Companies are then scored and selected based on their exposure to AI, market capitalization and liquidity.”
Unlike AIQ and XAIX, CHAT does not passively track an index. The portfolio management team for this ETF has broad discretion to pick and weight holdings they deem most attractive based on fundamental analysis. The result is a concentrated basket of 41 companies with a significant Magnificent Seven stock presence in the top holdings. CHAT charges a 0.75% expense ratio.
VistaShares Artificial Intelligence Supercycle ETF (AIS)
“AIS leverages our proprietary ‘Bill of Materials’ methodology that was designed by AI luminaries on our investment committee,” explains Adam Patti, CEO of VistaShares ETFs. “We analyze the supply chain, layer in the actual costs to build AI data centers and semiconductors, and then dig into the company financials to determine their true AI business pipelines and related revenue.”
The result is a unique basket of 56 holdings with minimal overlap with U.S. tech-stock-heavy indices like the S&P 500. “If you run an analysis between the S&P 500 and most AI ETFs, you will see high overlap,” Patti says. “Not so with AIS, which consists mainly of the ‘picks and shovels’ of AI infrastructure via companies that most investors may not own.” AIS charges a 0.75% expense ratio.
KraneShares Artificial Intelligence & Technology ETF (AGIX)
At first glance, AGIX looks similar to competing AI ETFs. The bulk of AGIX’s portfolio tracks the Solactive Etna Artificial General Intelligence Index, which includes names like Meta Platforms, Microsoft, Amazon and Nvidia Corp. (NVDA) in its top holdings. But what sets AGIX apart is the ability to allocate up to 15% of its portfolio to private, non-traded AI companies. This currently includes a 3.3% stake in AI startup Anthropic.
“KraneShares has a fair value committee that assigns a fair value to private holdings, based on factors such as primary round valuation, secondary market transaction prices and other material information,” explains Derek Yan, senior investment strategist at KraneShares. “Moreover, the maturing secondary private transaction market could provide liquidity if we want to change the exposure to Anthropic.”
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6 of the Best AI ETFs to Buy for 2025 originally appeared on usnews.com
Update 07/09/25: This story was published at an earlier date and has been updated with new information.
