Someone should start an AGI-focused ETF.
It would be an enormous public good.
This is, of course, not investment advice. I’d recommend not taking investment advice from me. I’m actually curious for your investment advice.
The one bet that you can make is that the markets are, in the long term, underpricing AI.
For the well-to-do among us, you can invest in the AI companies themselves, or that flashy “situationally-aware” hedge fund.
But for the rest of us, we’ve only got those already-stupidly-valuable big tech companies, the more well-known of the semiconductor supply chain, or the scraps of those 13F filings. And this is work. I would rather not have constantly watch Gemini 3 rumors, figure out if I should be shorting all semiconductors in case of the short-term bubble, watch for a Taiwan invasion or tariffs or the whole deluge of other relevant AI news.
So, someone should start an AGI-focused ETF. Maybe you?
This would be an enormous public good. Because of automation, many — starting with white collar workers — are going to lose their most valuable asset: their human capital.
As the returns to AGI are likely to be power-law distributed (ie, the best will perform much better than the average), keeping money in a bank account will be vastly outperformed by a regular S&P500 + Google + Nvidia/Intel mix, which will itself be outperformed by a strategy that takes advantage of the simplest projections by experts.
Learning the ins and outs of the stock market takes time. Instead, if the right fund manager were found, a fund that operated on the following assumptions, I predict, would vastly outperform the market. Here are some of driving assumptions:
The next 3 - 20 years will bring about the arrival of AIs that can automate all cognitive work, with the median in the next five years.
Most white collar work will be automated in the next five years. Companies will have to automate and stop hiring; otherwise, they’ll be outcompeted by those that do.
AI agents will run the economy, and their key input will be the compute they run on. Barring regulation, autonomous AI corporations.
In 5 years, robotics will be the main bottleneck to explosive growth. Land and industrial capital will therefore be enormously valuable.
An invasion of Taiwan is reasonably likely, which will tank the global economy and chip production. As that smart-cookie hedge fund is doing, having options that hedge semiconductor supply chain risk seems like a good idea.
The market is not pricing AGI. Interest rates should be higher. You should be long the US. We are not in a bubble, in the long run.
What would be the investing strategies of such a hedge fund?
Long:
Power companies. The main bottleneck to data center build-out. Existing power companies are astonishingly undervalued.
The entire semiconductor supply chain. Not just Intel, Nvidia, TSMC, and ASML, but the smaller players. Micron / AMD in the US, SK Hynix in Korea, or the German parts manufacturers. Despite their tremendous valuations, chips will still be the main bottleneck to inference capabilities writ large.
The entire data center supply chain. Cloud computing specialists, Oracle, but also consultancies for certain environmental reviews, electric transformer manufacturers, etc.
Defense corporations, eg, Anduril, Palantir. AI-first cybersecurity companies.
Public tech companies with large AI investments: Google, Microsoft, Amazon, Meta (everything but Apple). Both because they are control compute build out, and have investments in the private AI companies. Further focus on foreign owners of data centers, eg, G42.
Scientific firms with large amounts of lab space / are actively partnering with AI companies.
Large owners of industrial capital/factories/land — eg, the subcontractors of Ford, etc., that can be turned into robotics manufacturing.
Other. These are companies that would be most valuable, though are difficult for an ETF to invest in.
Privately held AI companies. In order of attractiveness: Anthropic, OpenAI,
Startups whose purpose is to end-to-end automate an entire vertical.
High-frequency trading firms that are using AI-based strategies
Short / especially don’t hold:
Most large-scale white-collar companies: eg. Fiverr, McKinsey, law firms, education companies
IT consultancies
Non-AI tech companies: Salesforce?
Text me, as usual, if you’d be interested in chatting about this (@jasonhausenloy.48 on Signal) — I may be able to help bounce ideas / fundraise / chat about personal finances / donating the profits of an endeavor like this. Some friends and I vibes-ed together a crappy portfolio for ourselves (request access), if you’re interested in a stop-gap for now.
Thanks to Duncan McClements and Lachlan Carroll for informative conversations.