Key Takeaways:

  • AI is reshaping industries like healthcare, finance, and energy, driving innovation and economic growth.
  • Investment opportunities include broad market, tech and AI-focused funds and ETFs.
  • Infrastructure and energy demand is rising providing additional investment opportunities.
  • Risks remain, including volatility and regulatory concerns—diversification and strong fundamentals are key.

We’ve all heard a lot about Artificial Intelligence, or AI, lately for several years now. It’s showing up in everything from voice assistants to self-driving cars. AI has created investment opportunity and is predicted by some to dwarf the industrial revolution in terms of capital expenditure and impact of how we all work and live. But what does it really mean for you—and your investments?

Let’s break it down.

What Is AI, Really?

AI is when computers are trained to think and learn like people. They can recognize patterns, make decisions, and even have conversations. The more data they get, the smarter they become.

One of the most well known types of AI is called a Large Language Model (LLM). These are advanced systems that can understand and generate human-like text. They’re used in chatbots, customer service, writing tools, and even coding assistants. Companies like OpenAI, Google, and Anthropic are leading the way in developing these models.

Where AI Is Making a Big Difference

AI isn’t just for tech companies. It’s changing how many industries work:

  • Healthcare: AI helps doctors find diseases earlier and create personalized treatments.
  • Manufacturing: Machines can now predict when they’ll break down and fix themselves before they do.
  • Farming: Farmers use AI to grow more food with fewer resources.
  • Transportation: AI helps delivery companies plan faster routes and even powers self-driving cars.
  • Education: Students get personalized lessons that adapt to how they learn best.
  • Retail: Stores use AI to recommend products and manage inventory.
  • Entertainment: Streaming services use AI to suggest shows you’ll love.
  • Energy: AI helps manage power grids and improve clean energy systems.
  • Cybersecurity: AI detects threats faster and helps protect sensitive data.
  • Customer Service: AI chatbots are improving response times and reducing costs for businesses.
  • Finance: AI helps to catch financial fraud, predict trends and enhance customer service.

How You Can Invest in AI

AI is expected to become a multi-trillion-dollar industry in the next decade. Here are some simple ways to get involved:

1. Exposure to AI “Hyper-scalers”

Some companies are leading the way in AI:

  • NVIDIA — Makes the chips that power AI
  • Microsoft — Uses AI in its software and cloud services
  • Google (Alphabet) — Uses AI in search, ads, and self-driving cars
  • Amazon — Uses AI in shopping, logistics, and cloud computing

2. Mutual Funds and ETFs

To gain diversified exposure to AI, you can invest in broad market, tech, and/or AI themed funds.

Why Infrastructure, Energy, and Data Centers Matter

AI isn’t just about software—it’s about the physical infrastructure that powers it. Behind every chatbot or recommendation engine is a massive network of data centers, energy systems, and hardware.

Data Centers: The Backbone of AI

  • AI-ready data centers use up to 30 megawatts of power, compared to 5–10 megawatts for traditional ones [1].
  • By 2030, 70% of global data center demand may come from AI workloads [2].
  • The U.S. could need \$500 billion+ in new data center capacity [3].

Energy: Powering the AI Boom

  • AI models are power-hungry, and data centers could use 11–12% of U.S. electricity by 2030 [4].
  • This creates investment opportunities in utilities, renewable energy, and energy storage.

Capital Requirements

  • Global infrastructure spending to support AI could reach \$6.7 trillion by 2030 [2].
  • Microsoft, BlackRock, and partners are raising \$30–100 billion to build AI data centers and energy systems [5].

Private Investment Opportunities

  • REITs that invest in data centers
  • Infrastructure funds focused on AI and energy
  • Utility and energy stocks benefiting from rising demand
  • Private equity in data center startups, power, accelerated computing, data software, and services

What Wall Street Is Worried About

Even though AI is exciting, it’s not without risks. Here’s what investors should keep in mind:

1. Volatility

AI stocks can swing wildly. Palantir dropped 18% in just a few weeks [7].

2. Overvaluation

Some AI companies are trading at extremely high prices. Palantir’s P/E ratio hit 501, and CrowdStrike’s reached 401, raising concerns about sustainability [6].

3. Lack of Profitability

Many AI companies are spending heavily without making money. Google’s AI spending surged 84% year-over-year, but profits remain thin [8].

4. Unproven Business Models

A recent MIT study found that 95% of enterprise AI projects fail to deliver financial returns [9]. Most companies are stuck in pilot mode, unable to scale AI effectively.

5. Regulatory and Ethical Risks

AI systems can make mistakes, show bias, or spread misinformation. Governments are starting to regulate how AI is used, which could impact profits and operations [8].

Final Thoughts

AI is changing how the world works—and it’s opening up new ways to grow your wealth. But like any fast-growing sector, it comes with risks. The key is to invest wisely: diversify and be ready for some bumps along the way.

Investors can gain healthy exposure to AI investments mainly through mega-cap “AI hyper-scaler” companies such as Nvidia by owning well diversified mutual funds and ETFs. These funds also have the potential to capture future AI related growth in non-tech industries. If you’d like to talk about how AI fits into your portfolio, we would be happy to discuss. Please let us know if you have any questions or thoughts.

Sincerely,

Jason and your Saling Wealth Advisors Team

[1] CNBC [2] Yahoo Finance [3] Wikipedia [4] Research Affiliates [5] Novel Investor [6] Wells Fargo [7] S&P Dow Jones [8] Clocks Go Forward (quote slightly paraphrased from N. Murray)

Jason Stuber, CFA

Chief Investment Officer

CONNECT

This material is not financial advice or an offer to sell any product and is not a recommendation to buy or sell any particular security. The opinions expressed are those of the Saling Wealth Advisors’ Management Investment Team and are subject to change without notice.

Saling Wealth Advisors (“SWA”) is an independent SEC registered investment advisor. Registration does not imply a certain level of skill or training. This material is provided for informational and educational purposes only. More information about SWA including our advisory services, fees, and objectives can be found in our Form ADV Part 2A, which is available upon request.

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