Conversational Computers: A Theme Accessible With This AI ETF

The artificial intelligence (AI) space is evolving at a rapid pace and part of that evolution includes how humans interact with computers, also known as conversational AI. The Global X Future Analytics Tech ETF (NasdaqGM: AIQ) is one ETF that provides exposure to that theme.

The Global X Future Analytics Tech ETF tries to reflect the performance of the Indxx Artificial Intelligence & Big Data Index, which is comprised of companies involved in the development and utilization of artificial intelligence and big data. The underlying index includes those involved in generating vast amounts of data and developing proprietary AI systems to derive actionable insights from the data set. The ETF will also cover companies that provide AI-as-a-Service for big data analytics or are developing hardware integral to powering AI systems, such as quantum computing.

Through personal assistants, such as Apple’s Siri and Amazon’s Alexa, humans are already engaged in some level of conversational AI, but the industry is looking to enhance those interactions and more.

“Conversational AI is the development of software programs that allow a computer to understand what a human intends to say or ask for, decipher its meaning, and communicate relevant responses,” said Global X in a recent note. “Given the complexities of human interactions, AI algorithms depend on language models that are massive in scope and complexity and backed by substantial computing power.”

AIQ Angles

AIQ’s underlying index screens artificial intelligence companies based on artificial intelligence applied to product services and artificial intelligence-as-a-service for big data applications. Additionally, companies included in the underlying index include companies that produce hardware for artificial intelligence applications and those developing quantum computing.

Natural language understanding (NLU), a theme some AIQ components tap into, is viewed as a driver of conversational AI advancements.

NLU “is one branch of AI that leverages computing power to understand language inputs, either speech, text, or a combination of both. For NLU technology to be maximally useful, it must be able to process language in a way that is not exclusive to a single task, genre, or dataset,” according to Global X.

Related: Make The Move to Quality With This Global X Dividend ETF 

AIQ holds 80 stocks and as is the case with many thematic ETFs, the fund is not explicitly dedicated to one sector. With AI’s wide-ranging applications, multiple sectors can be part of the AI investment thesis, but the fund features hefty allocations to the technology and communication services sectors.

“Conversational AI is expected to be omnichannel, multi-device, and multi-language, potentially disrupting the nearly $86 billion global outsourced services market by leveraging chatbots, messaging apps, digital/personal assistants, and voice search,” notes Global X.

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The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.