Betting on the AI Arms Race? These ETFs Lead the Charge
Tech giants are building the infrastructure for the next digital revolution. These ETFs aim to give you a slice of it.
The latest earnings from U.S. big tech make it clear that artificial intelligence is no longer just a buzzword. It is becoming the backbone of their future.
Meta and Microsoft’s results show how AI is already boosting profitability. The bigger story is in their massive capital investments, which point to sustained AI-driven growth for years to come.
As shown in the image below, from J.P. Morgan’s Guide to Markets, July 2025, investments in AI by hyperscalers have increased in recent years and are expected to continue rising. While many sectors stand to benefit from AI, the tech sector remains the clear frontrunner, capturing the largest share of the gains compared to other industries.
Recently, the Trump Administration released the Winning the AI Race: America’s AI Action Plan, a comprehensive roadmap outlining a series of policy goals and recommended policy actions intended for near-term execution by the federal government. This plan complements the earlier released Removing Barriers To American Leadership In Artificial Intelligence.
The plan has three core pillars aimed at advancing American AI leaders:
- Accelerating AI Innovation: The Plan's first pillar emphasizes promoting U.S. leadership in creating, deploying, and using AI technologies. It instructs federal agencies to reduce regulations that unnecessarily impede AI development or deployment and to reassess any enforcement measures that might hinder AI innovation. The Plan indicates that federal funding could be limited for states with restrictive AI regulations, showing a preference for more flexible regulatory frameworks.
- Building American AI Infrastructure: The second pillar of the Plan focuses on establishing a strong physical and digital infrastructure to bolster U.S. leadership in AI. It aims to simplify the permitting process for data centers, semiconductor production, and energy infrastructure by introducing new environmental exemptions and expanding access to federal lands for data center and power generation projects. This pillar highlights the importance of advancing U.S. semiconductor manufacturing, constructing secure data centers for military and intelligence purposes, and cultivating a skilled workforce to support these initiatives. Additionally, the Plan calls for improved cybersecurity measures for critical infrastructure and the development of an AI-specific incident response system.
- Leading in International AI Diplomacy and Security: The third component of the Plan aims to expand U.S. AI leadership worldwide, safeguard essential AI technologies, and counteract foreign adversarial influence, especially from China. The Plan proposes creating a comprehensive AI export strategy that supplies hardware, models, software, applications, and standards to allies while limiting AI computing resources to “rivals.” According to the Plan, federal agencies will be encouraged to develop new export controls on chips and “semiconductor manufacturing subsystems,” while coordinating protection efforts globally through “policy levers.”
With corporate capital being directed towards AI and political policy being implemented to bolster AI development, we are truly just at the beginning stages of a seismic technological shift within the business and societal landscape.
A Look at the Growing Dominance of Big Tech
The strong performance of big tech is nothing new, but its growing dominance remains worth watching. The U.S. tech sector has just hit a record level of outperformance, surpassing last year’s highs and even the peaks of March 2000.
Much of this strength comes from the AI-driven momentum of the Magnificent Seven and other players like Palantir. Their rising weight in the S&P 500 underscores just how central the tech sector has become to the U.S. equity market.
Investing in the Semiconductor Ecosystem with ETFs
With AI investments accelerating, investors seeking targeted exposure to companies in this space may consider the Global X Artificial Intelligence Semiconductor Index ETF (CHPS) and the Global X Artificial Intelligence Infrastructure Index ETF (MTRX).
CHPS tracks the PHLX US AI Semiconductor Index, offering exposure to U.S.-listed companies involved in the AI semiconductor value chain.
MTRX follows the Mirae Asset AI Infrastructure CAD Index, which includes global companies providing the infrastructure needed to support artificial intelligence.
Investors should note that MTRX launched in January 2025 and has a limited performance history.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
