NVIDIA Corp.’s (NASDAQ:NVDA) and Eli Lilly and Co.'s (NYSE:LLY) newly announced $1 billion AI co-innovation lab underscores how artificial intelligence is spreading beyond data centers into medicine, and ETF investors are beginning to price that into thematic funds.
• Roundhill Generative AI & Technology ETF stock is under selling pressure. Why is CHAT stock retreating?
The partnership aims to expedite drug discovery by tightly integrating AI models with biological experimentation, and could broaden the commercial runway for companies that supply AI compute, software and AI-enabled healthcare solutions.
For ETFs, this development reinforces why investors are allocating into baskets that capture multiple layers of the AI value chain. At the core of the AI hardware story are semiconductor ETFs such as the VanEck Semiconductor ETF (NASDAQ:SMH) and the iShares Semiconductor ETF (NASDAQ:SOXX). Both funds provide exposure to chip designers and manufacturers that power large language models and biomedical compute workloads, with SMH historically allocating a significant portion of its assets to Nvidia itself.
Beyond pure hardware, AI thematic ETFs like the Roundhill Generative AI & Technology ETF (NYSE:CHAT) or the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) blend Nvidia with broader technology and automation exposure, appealing to investors seeking diversified AI growth across sectors that may include drug discovery compute platforms, robotics and automation tools. CHAT, for example, holds a basket of companies at the forefront of generative AI, while BOTZ balances AI with robotics and industrial automation themes.
Although there is no specific ETF yet that marries biotech and AI outright, health care and biotech sector ETFs such as the iShares Nasdaq US Biotechnology ETF (NASDAQ:IBB) or broader health care innovation funds could see increased interest if AI adoption measurably speeds drug development timelines, potentially lifting valuations across the group.
For more risk-tolerant investors, emerging AI funds like the WisdomTree Artificial Intelligence and Innovation Fund (BATS:WTAI) or newer actively managed products also tap a mix of AI software and systems builders whose technology could underpin next-generation pharma innovation.
The Nvidia–Lilly tie-up highlights that AI is now a cross-industry growth driver that ETF strategies can capture through diversified exposure to semiconductors, thematic AI plays and innovation-oriented health care baskets.
Photo: Shutterstock
