AI Payoff Worries Continue: What Lies Ahead of AI ETFs?

While the world is binging on Artificial Intelligence (AI), worries over payoffs from massive AI investments are not leaving stakeholders and investors. Artificial intelligence firms such as OpenAI are racing fast with ambitious plans to pour hundreds of billions of dollars into data centers. There are many other players — big or medium — that are investing heavily in AI.

However, their progress on revenue generation to match these huge outlays has been much slower. Bain & Company estimates that the shortfall could be far greater than previously thought, per a Bloomberg report, as quoted on Yahoo Finance.

Bain’s research reveals that building the data centers with the required computing power for meeting the estimated demand will need around $500 billion in capital investment annually. By 2030, AI companies or the cloud service providers will require about $2 trillion in total annual revenue to support that $500 billion.

According to Bain & Co.’s annual Global Technology Report, AI firms are on track to fall short by nearly $800 billion, as monetization of AI tools and services lag behind the costs needed to fund data centers and related infrastructure, as quoted on the above-mentioned Bloomberg article cited by Yahoo Finance.

Growth Over Profits: Current Theme of AI Companies?

In August, OpenAI CEO Sam Altman stated that the artificial intelligence (AI) industry is experiencing a bubble fear, according to a report from The Verge, as quoted on CNBC. Altman told CNBC that OpenAI’s annual recurring revenues are on its way to surpass $20 billion this year, which fails to make the company profitable, as mentioned in the same CNBC article.

OpenAI is focusing on growth over profit, but it expects to be cash-flow positive by 2029, Bloomberg has reported, as indicated in the above-mentioned Yahoo Finance article. NVIDIA and OpenAI also announced on Sept. 22, 2025, a letter of intent for a strategic partnership to deploy at least 10 gigawatts of NVIDIA systems for OpenAI’s next-generation AI infrastructure.

Valuation Rising for Both Public-Private AI Companies

Just as the AI boom boosted the market caps of NVIDIA, Broadcom, Oracle, and other big techs in public markets, it is aiding private market valuations, too. OpenAI tops this private market group with $324 billion of valuation, followed by Anthropic at $178 billion, with xAI at $90 billion, according to Forge, as quoted on CNBC.

The CNBC article went on to highlight that, according to Forge, 19 AI firms have raised $65 billion so far this year, making up 77% of all private-market capital. Note that Anthropic's valuation surged almost three times from March 2025, as quoted on eisneramper.com.

In a nutshell, the demand for AI is here to stay, and AI will leave its footprint in every sector. Although some market experts doubt the companies’ current revenue generation ability, we expect them to adopt various monetization services over time as AI becomes indispensable.

The long-term trajectory of subscription models, API fees, and the pace of enterprise adoption are still unclear. The entire AI ecosystem may evolve from where it stands right now. Agreed, the revenue stream may be volatile and back-end loaded, but AI is definitely going to change the world in the coming days.

Artificial Intelligence ETFs in Focus

Against this backdrop, the below-mentioned AI-based exchange-traded funds (ETFs) may be tapped at the current level. The ETF or the basket approach minimizes the company-specific concentration risks.

These ETFs include the likes of Global X Robotics & Artificial Intelligence ETF BOTZ, Global X Artificial Intelligence & Technology ETF AIQ, ROBO Global Robotics & Automation Index ETF ROBO and First Trust Nasdaq Artificial Intelligence & Robotics ETF ROBT.

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This article originally published on Zacks Investment Research (zacks.com).

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