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Paradigm-Shifting
Technologies
The widespread integration of artificial intelligence (AI) is set to transform nearly every industry. But AI
development and infrastructure are emerging as massive industries themselves. Globally, AI-specific digital infrastructure could be a $1 trillion business by 2032. We explore the growth of AI infrastructure as
well as AI’s application across industries, including robotics and defense.
Bloomberg (2024, March 8), Generative AI races toward $1.3 trillion in revenue by 2032.
Bloomberg (2024, March 8), Generative AI races toward $1.3 trillion in revenue by 2032.
Tech Over Time
The world can change dramatically in a lifetime. Recognizing past dramatic shifts from technological innovations helps us envision a vastly different world in the decades to come.
Backlinko (2024, June 4), ChatGPT / OpenAI Statistics: How Many People Use ChatGPT?; Global X ETFs forecast with information derived from: Our World in Data (2019, July 27), Share of United States Households
Using Specific Technologies.
AI
Infrastructure
Laying the Groundwork
Supercomputing Witnesses Significant Progress
Significant increases in computing speeds and efficiency are propelling the AI revolution and boosting productivity.
Our World in Data. (2024, April 22). Computational Capacity of the Fastest Supercomputers.
AI Could Accelerate Corporate Profitability
AI will likely extend the benefits of the information age and continue to have a significant impact on corporate profitability, potentially driving both earnings growth and overall macroeconomic expansion.
Bloomberg L.P. (n.d.), financial data as of November 19, 2024.
AI Infrastructure Spending Is Surging
The potential for productivity growth is spurring investments in AI infrastructure. Four tech giants—Amazon, Google, Meta, and Microsoft—are expected to spend upwards of $213 billion in capital spending in 2024.
Factset (n.d), AMZN, GOOGL, MSFT, META financial data.
AI Is Fueling a Data Center Boom
With AI requiring specialized infrastructure and more computing power, increased construction of data centers in the United States is needed.
CBRE Report (2024, March 7), North American Data Center Pricing Nears Record Highs, Driven by Strong Demand and Limited Availability.
GPUs and Custom-Made AI Chips Are Fueling Semiconductor Growth
Alongside training GPUs, the AI chip market is being boosted by custom-made chips for specific workloads, which are increasingly being used by cloud data centers. By 2030, spending on AI chips is expected to grow to nearly $500 billion, up from just $70 billion in 2023.
Global X ETFs forecast with information derived from: IDC (2024, February), IDC Semiconductor Market Forecast 24Q1, Outlook for AI Semiconductor & Storage Components in IT Infrastructure; The Next
Platform (2024, July 15), Ongoing Saga: How Much Money Will Be Spent on AI Chips?
d-Matrix Battles the High Cost of AI Chips
Generative AI has the potential to disrupt industries, but the chips that train AI models can cost more than $30,000 apiece. Chip designer d-Matrix thinks it has a solution.
U.S. Data Center Power Demand Expected to Double by 2030
In six years, the power used by U.S. data centers is expected to double—surpassing the growth rates of residential, commercial, and industrial power usage.
Global X ETFs forecast with information derived from Utility Dive (2024, May 24), U.S. power demand expected to jump 2.7% this summer, plus 5 other takeaways from FERC’s open meeting.
AI Expected to Transform Personal Devices
Advances in mobile connectivity infrastructure and AI-equipped devices will bring AI apps closer to consumers. By 2030, 80% of iPhones could run Apple’s AI assistant, Apple Intelligence.
Global X ETFs forecast with information derived from: Statista (2024, May 17), Active Apply iPhone Smartphone Units Globally 2008–2023.
The AI platform shift is still in its early stages. As AI infrastructure develops, it is likely to unlock a wide range of use cases, offering
evidence of monetizable opportunities and returns on investment. This success is likely to fuel further funding for continued buildout and research, expanding the scope for wider AI
integration.”
Tejas Dessai
Director of Thematic Research,
Global X ETFs
Global X ETFs
Robotics
Breakthroughs in Automation
A New Era for Robotics
Responding to reshoring agendas and a tight labor market, U.S. manufacturers are aggressively investing in automation, with installation of industrial robots growing each year since 2020.
IFR Pressroom (2022, October 26), Sales of Robots for the Service Sector Grew by 37% Worldwide.
Robotics in Manufacturing
Rising hourly wages for U.S. manufacturing workers and the decreasing costs of robotic setups are contributing to accelerating robotics adoption in manufacturing, making robotic automation critical for companies to stay competitive.
Global X ETFs forecast with information derived from Trading Economics (2024), United States Average Hourly Wages in Manufacturing.
Global X ETFs forecast with information derived from Statista Research Department (2023, September 7), Industrial Robots: Average Selling Price 2009–2018.
Humanoids Present the Next Robotics Breakthrough
With increasing access to advanced AI, humanoid robots—machines that resemble a human being—present one of the next frontiers in automation, with the devices integrating into everyday life.
Global X ETFs forecast with information derived from: Science Robotics (2017, December 20), Humanoid Robotics – History, Current State of the Art, and Challenges; Goldman Sachs (2022, November 15),
Humanoid Robots: Sooner Than You Might Think; Macquarie (2023, February 23), Are We Turning a Corner on the Humanoid Robot Age?; The Economic Times (2024, January 22), Elon Musk Expects 1 Billion
Humanoid Robots by 2040s.
Growth of Humanoid Sales Mirrors Early Automobile Adoption
Just as autos transitioned from a nascent idea to widespread consumer sales in less than 10 years in the late 1800s, humanoids are poised to take off.
Global X ETFs forecast with information derived from: Strategy + Business (2023, August 15), Boston Dynamics Wants to Change the World with Its State-of-the-Art Robots; Whisbi (2022, February 1), The
History of Car Sales.
Humanoids Present Large Total Market Opportunity
In addition to industrial use cases, humanoids are likely to be adopted for a variety of household and domestic applications such as housework, security, and entertainment.
Global X ETFs forecast with information derived from: Goldman Sachs (2022, November 15), Humanoid Robots: Sooner Than You Might Think; Science Robotics (2017, December 20), Humanoid Robotics – History,
Current State of the Art, and Challenges; The Economic Times (2024, January 22), Elon Musk Expects 1 Billion Humanoid Robots by 2040s.
Robotics, often viewed as the physical application of AI, is currently at an inflection point. As robot costs decline, and intelligent AI becomes more
widely accessible, major industries like personal transportation, manufacturing, and domestic work could be revolutionized.”
IDO CASPI
Research Analyst,
Global X ETFs
Global X ETFs
Defense Technology
Shield of Innovation
Growing Conflicts Push Military Spending Higher
Fueled by the war in Ukraine and escalating tensions in the Middle East, world military expenditures hit an all-time high of $2.44 trillion in 2023.
Global X ETFs forecast with information derived from Fortune Business Insights (2024, October 14), Military Drone Market Size, Share & Russia-Ukraine War Impact Analysis, 2024–2032. Report ID: FBI102181.
U.S. Defense Spending Expected to Reach $1 Trillion
With a proposed top line of $886 billion for 2024 fiscal year defense spending, the U.S. Congressional Budget Office projects defense spending in the United States will surpass $1.1 trillion by 2032.
Congressional Budget Office (2022, May 25), The Budget and Economic Outlook: 2022 to 2032.
Defense Is Going Digital
Military spending has traditionally revolved around conventional hardware and the supply of ammunition. Current budgets reflect an increase toward research and development that bolsters digitalization.
Congressional Budget Office (2024, June 18), The Budget and Economic Outlook: 2024 to 2034.
AI in Defense Tech
As AI and robotics play more pivotal roles in modern warfare, the U.S. military’s request for funds for AI investment has doubled in two years.
Roll Call (2024, March 5), Pentagon’s priority on AI spending could shield it from cuts.
Increases Anticipated in Drone and Autonomous Vehicle Spending Worldwide
Military spending on drones and autonomous aerial vehicles is projected to double by 2030 as these products prove key to next-generation defense.
Global X ETFs forecast with information derived from Fortune Business Insights (2024, October 14), Military Drone Market Size, Share & Russia-Ukraine War Impact Analysis, By Product Type (Fixed Wing,
Hybrid & Rotary Wing), By Range (Visual Line of Sight, Extended Visual Line of Sight, & Beyond Line of Sight), By Technology (Remotely Operated Drones, Semi-Autonomous Drones, Autonomous Drones),
By System (Airframe, Avionics, Propulsion, Payload, Software), By Application (Intelligence, Surveillance Reconnaissance, & Targeting, Combat Operations, Battle Damage Management), & Regional
Forecast, 2024–2032. Report ID: FBI102181.
Shifts in Cybersecurity Spending Point to Increased Importance of Software
As cloud-native and AI-native security solutions come to market, spending on cybersecurity will likely increase as the sector sees a shift from services to software.
Global X ETFs forecast with information derived from Gartner (2024, August 28), Gartner Forecasts Global Information Security Spending to Grow 15% in 2025.
Rising geopolitical tensions and the growing integration of technology into defense are driving a surge in military spending. By 2030, global defense
expenditures are expected to exceed $3.4 trillion, with a significant portion directed toward AI, cybersecurity, and advanced defense technologies. This shift benefits companies across the defense
supply chain, from military contractors to developers of specialized hardware and defense-specific software.”
IDO CASPI
Research Analyst,
Global X ETFs
Global X ETFs