Democrat or Republican in 2024, AI ETFs to Rule Ahead?

As the United States gears up for the 2024 presidential election, a new player has emerged on the political stage – Artificial Intelligence (AI) stocks. The rise of AI technology has not only transformed industries but is also starting to influence political landscapes.

OpenAI founder and CEO Sam Altman recently expressed confidence in both the generative AI sector and the U.S. as a country, regardless of the outcome of the upcoming presidential election. Speaking at the World Economic Forum in Davos, Altman responded to concerns raised by Donald Trump's significant victory in the Iowa caucus, as quoted on CNBC.

Trump's Iowa Victory and Public Perception

Donald Trump's recent victory in the Iowa primaries –  which set a new record with a 30-point lead over his closest rival – has sent ripples through various sectors, notably impacting AI stocks. This win, reinforcing Trump's significant influence in the political landscape, has led to mixed reactions in public perception.

On one hand, his business-oriented approach and advocacy for deregulation have historically buoyed market confidence, potentially benefiting AI companies and investors seeking a more laissez-faire regulatory environment. However, on the other hand, Trump's unpredictable policies and past stances on trade and technology have also fostered uncertainty, causing some investors to approach AI stocks with caution.

But then, the Republican Party might emphasize the role of AI in driving economic growth and maintaining national security. Their policies could focus on encouraging entrepreneurship in the AI sector, reducing regulations to foster innovation, and employing AI in defense systems. The Republicans would likely advocate for a market-driven approach to AI development, emphasizing minimal government intervention.

Democrats: Embracing AI for Progressive Change

The Democratic Party, traditionally seen as progressive and open to technological innovation, might view AI as a tool for societal advancement. Their platform could focus on using AI to tackle climate change, improve healthcare, and enhance public services. However, they would also be concerned with the ethical implications of AI, advocating for regulations to prevent biases in AI algorithms and ensure privacy.

The Future of AI Regulation and Ethical Considerations

Altman emphasized the critical role of governmental policies, such as President Biden's executive order on AI, in guiding the development and use of AI technologies. This order calls for standards in safety, security, and the safeguarding of privacy and civil liberties.

OpenAI released new guidelines to prevent the misuse of its AI tools, including ChatGPT and DALL·E 3, especially in the context of global elections. These measures include cryptographic watermarks on DALL·E 3 images and a ban on using ChatGPT in political campaigns.

Anna Makanju, vice president of global affairs at OpenAI, elaborated on the company's efforts to moderate and enforce these new guidelines effectively, leveraging their own tools for scalability, as quoted on CNBC.

Against this backdrop, below, we highlight a few artificial intelligence ETFs that are great long-term bets now.

ETFs in Focus

ROBO Global Robotics and Automation Index ETF (ROBO)

The underlying ROBO Global Robotics and Automation Index measures the performance of companies which derive a portion of revenues and profits from robotics-related or automation-related products or services. The fund charges 95 bps in fees.

Global X Robotics & Artificial Intelligence ETF (BOTZ)

The underlying Indxx Global Robotics & Artificial Intelligence Thematic Index invests in companies that potentially stand to benefit from increased adoption and utilization of robotics and artificial intelligence, including those involved with industrial robotics and automation, non-industrial robots, and autonomous vehicles. The fund charges 69 bps in fees.

iShares Robotics And Artificial Intelligence Multisector ETF (IRBO)

The underlying NYSE FactSet Global Robotics and Artificial Intelligence Index is composed of equity securities of companies primarily listed in one of 43 developed or emerging market countries that are the most involved in, or exposed to, one of the 22 robotics and artificial intelligence-related FactSet Revere Business Industry Classification Systems. The fund charges 47 bps in fees.

First Trust Nasdaq Artificial Intelligence and Robotics ETF (ROBT)

The underlying Nasdaq CTA Artificial Intelligence and Robotics Index is designed to track the performance of companies engaged in Artificial intelligence, robotics and automation. The fund charges 65 bps in fees.

(Disclaimer: This article has been written with the assistance of Generative AI. However, the author has reviewed, revised, supplemented, and rewritten parts of this content to ensure its originality and the precision of the incorporated information.)

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ROBO Global Robotics and Automation Index ETF (ROBO): ETF Research Reports

Global X Robotics & Artificial Intelligence ETF (BOTZ): ETF Research Reports

First Trust NASDAQ Artificial Intelligence and Robotics ETF (ROBT): ETF Research Reports

iShares Robotics and Artificial Intelligence Multisector ETF (IRBO): ETF Research Reports

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Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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