It’s not often that there’s a genuine hinge point in history, a time that has a profound effect on the future. But 30 November 2022’s launch of ChatGPT, the generative artificial intelligence (AI) chatbot developed by OpenAI, could well prove an influential moment that signalled the beginning of great change in the economy and society.
Within a few short months, ChatGPT became the fastest-growing consumer software application, with 100 million people using it to generate text. Since then, AI software has become recognised for its human-like intelligence and potential to transform many industries, as well as society more broadly.
The promise of an AI-driven industrial revolution has rewarded investors who had the foresight to invest early with substantial stock price gains. Since the day of ChatGPT’s launch, the Nasdaq Global AI and Big Data Index, a proxy for AI stocks listed on public stock exchanges, has risen by approximately 135%1. Like all stock indexes, it is an average and the leading AI stocks have done better still.
Every month the capabilities of AI software improve and it’s used to make businesses more productive, as well as bringing innovation in areas as diverse as healthcare and robotics. But even as AI’s potential begins to be achieved, the investor faces a challenge: with AI evolving at such a pace and becoming a highly competitive field, what’s the smart way to profit from its growth?
The growth of AI
There’s little doubt that the AI market should grow rapidly. Forecasts vary but PwC research2 shows global GDP could be up to 14% higher in 2030 as a result of AI – the equivalent of an additional $15.7 trillion – making it the biggest commercial opportunity in today’s fast changing economy. This shows AI’s huge potential to transform many sectors and create substantial economic value.
AI’s capabilities continue to improve at pace. The acronym refers to computer systems that can perform tasks normally requiring human intelligence. They can analyse vast amounts of data, identify patterns and even make predictions – learning and adapting as they do so.
Now there’s even talk of artificial super intelligence, with an intellectual scope beyond human intelligence, although the timeframe for this remains uncertain.
Some of the earliest examples of what we now consider AI appeared in the 1950s, when US computer scientists developed machine learning algorithms that could play the board game of checkers. Since the 2010s, AI’s evolution has accelerated in part due to innovations in the computing chips used for video gaming. The advent of ChatGPT marked AI moving from the lab’s experiments to having real world applications.
How to invest in AI
Investing in AI could be seen as highly profitable and may well continue to deliver gains as the industry grows rapidly. Nvidia, the US company that makes the leading ‘Hopper’ and ‘Blackwell’ data centre AI chips, recently became the first company to surpass USD 4 trillion in market capitalisation3.
Arguably, the key to investing in AI is understanding the different areas to target – including semiconductors, AI software platforms, cloud computing, data centres and cyber security. But it’s difficult for individual investors to judge which companies have significant competitive advantage, particularly among the AI platforms where competition to release better models is intense.
Diversifying investments across companies that both enable AI, and benefit from it, is the answer to this problem. In this way, investors can gain from the AI revolution’s growth, while spreading the risks associated with individual stocks.
The key to investing in AI is understanding which companies will have sustainable competitive advantage over time. While individual AI models like OpenAI’s ChatGPT-4o and Google’s Gemini 2.5 Pro demonstrate a range of capabilities, the eye-watering pace of innovation means the leading AI model changes week by week.
Historically, we have focussed on allocating to semiconductor companies but moving forward we expect that the companies with technology platforms that can distribute AI services to customers may have competitive advantage. Their customers are locked in by a combination of network effects and switching costs.
Looking further ahead, we are turning to companies that stand to benefit from productivity gains. The application of AI to their business models can simultaneously reduce costs and increase growth, with shareholders capturing the value created. Established industries like cyber security could also stand to benefit, as well as emerging sectors like robotics, though as these industries are more fragmented the winners may be harder to pick.
The different type of structures for investment
Looking back at the early stages of the AI rally it may seem obvious in hindsight that stock picking was relatively straightforward. Yet over time, as momentum shifts to more fragmented sectors, we favour using a combination of actively managed and exchange-traded funds (ETFs) to allow for a more diversified approach. There are also opportunities in private markets, but while these companies could offer the potential for higher long-term returns, they typically carry higher risk and are illiquid.
How to invest in the AI revolution with Brown Shipley
At Brown Shipley, we apply strategic insight to help our clients invest in the transformative growth of AI. We have identified several funds and ETFs that we believe will deliver our clients diversified exposure to companies at the forefront of the AI and robotics revolution.
Alternatively, we can help clients to identify individual stocks if they prefer.
The AI revolution is here and moving quickly. It presents an opportunity for the companies at its forefront to grow fast – and a chance for smart investors to gain from what’s likely to be the biggest economic change of our time.
For more information on how to invest in AI, speak to a Brown Shipley Client Advisor or download our ‘Artificial intelligence’ paper.
Start the conversation. We’re here to listen.
1 To the end of 21 July 2025. Source: Nasdaq. https://indexes.nasdaqomx.com/Index/History/NYGBIG
2 Source: PwC ‘Sizing the Prize’ https://www.pwc.com/gx/en/issues/analytics/assets/pwc-ai-analysis-sizing-the-prize-report.pdf
3 Source: Reuters: Nvidia's stock market value hits $4 trillion on AI dominance | Reuters
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Information correct as of 7 November 2025
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