Mirae Asset Global Investments has announced the launch of a new Exchange Traded Fund (ETF) dubbed the TIGER Global On-Device AI ETF. This financial product offers investors the opportunity to gain exposure to companies at the forefront of on-device AI technology—a growing segment in the AI market where computation is performed directly on the user’s device, eliminating the need for data transfer to external servers. This allows for real-time processing without internet connectivity, effectively addressing concerns around latency, security, and energy consumption.
On-device AI is poised to become an integral part of making AI technology as accessible as personal assistants, with its utility set to expand across various industries. The TIGER Global On-Device AI ETF focuses its investments on companies that are central to this technology ecosystem, including those involved with Neural Processing Units (NPUs) which are essential for AI inference operations.
Leaders in the NPU space include prominent tech companies like Qualcomm, Intel, MediaTek, Apple, and ARM. Investing in the ETF provides access to a curated list of companies that are not only NPU producers but also part of the broader on-device AI ecosystem, encompassing AI model providers and device manufacturers. This strategic investment approach caters to tech-savvy investors looking to capitalize on the anticipated growth in on-device AI application and integration across smart devices.
ETF Manager Byungseok Kim expects that just as the release of platforms like ChatGPT sparked competition in AI development, the on-device AI sector could replicate the explosive demand seen for graphics processing units (GPUs) in previous years. The TIGER Global On-Device AI ETF is envisioned to be an investing pivot into the next tech revolution much like how investments in NVIDIA were in the past.
Current Market Trends
The introduction of the TIGER Global On-Device AI ETF arrives at a time when there is a significant shift in the AI market toward edge computing, where processing is done locally on devices. This trend realigns investment focus toward companies developing technologies that support on-device processing capabilities. The global edge AI software market is expanding rapidly, with expectations to grow from $590 million in 2020 to $1.83 billion by 2026 at a Compound Annual Growth Rate (CAGR) of 20.8%, according to MarketsandMarkets Research.
Forecasts
The continuing advancements in AI algorithms, along with improvements in semiconductor technology, hint at a future where on-device AI could see widespread adoption across consumer electronics, industrial automation, automotive, and healthcare sectors. The pervasiveness of IoT devices and the rising concern for privacy and data security further fuel this trend. Companies positioned at the vanguard of this technology stand to benefit substantially as the ecosystem matures.
Key Challenges and Controversies
The pursuit of on-device AI technology is not without its challenges. Energy efficiency is a major concern, as powerful NPUs may require significant power, leading to thermal issues and draining device batteries. Additionally, the push for on-device AI raises concerns about the fragmentation of data, which could impede the improvement of AI models that benefit from large, diverse datasets. There are also potential controversies surrounding the use of AI in surveillance and data privacy, as more powerful devices could enable greater data collection capabilities at the edge.
Advantages and Disadvantages
Investing in a specialized ETF like the TIGER Global On-Device AI ETF offers several advantages. It provides exposure to a niche market of on-device AI, which may experience significant growth, while also offering diversification across several companies within the space. It affords the opportunity to invest in the core companies that will power the next generation of smart devices and applications.
There are, however, disadvantages as well. Technology-focused ETFs can be volatile, and the success of the ETF is tied to the unpredictability of technological advancements and market adoption. Additionally, investors are implicitly betting on a particular vision of the future of AI, which may change as the technology evolves.
Related Links
For investors or readers who are interested in learning more about AI, investment opportunities, and the current state of the AI market, the following links to major domains may provide valuable information:
– Mirae Asset Global Investments
– Qualcomm
– Intel
– Apple
– ARM
These links connect to the main domains of the companies and entities involved in the on-device AI technology market, providing resources for further exploration into the topic.