Investment Opportunities as AI, Robots Transform Labor

AI capabilities are accelerating beyond current adoption rates. We’re approaching an inflection point that could redefine work itself. Investors should be aware of the dynamic changes under way and how they can gain exposure in their portfolios. Importantly, AI and robotics are not just transforming manufacturing but service industries as well. 

The mathematics of robotic labor are compelling. Unlike human workers, robots operate continuously without breaks or vacation time. They offer nearly 24/7 operation capability with “train one, train a million” scalability. 

This represents a fundamental departure from traditional human learning curves. It creates exponential productivity advantages that traditional labor economics cannot match.

This scalability becomes pronounced in sectors requiring consistency, precision, and round-the-clock availability. High-volume processing and repetitive task execution show the greatest automation potential.

This is already taking hold within manufacturing. As reshoring remains topical, the new wave of manufacturing will require support from AI and robotics: read more. Countries embracing AI integration may gain significant economic advantages.

Conventional wisdom suggests service-based economies enjoy natural protection from automation. However, new AI capabilities paint a different picture. Emerging AI and humanoid robot capabilities are expanding into service sectors previously considered immune.

For example, the legal profession faces AI systems that can review contracts with increasing accuracy and conduct comprehensive legal research. These systems draft documents at superhuman speed while analyzing case precedents instantly. When AI delivers high-quality legal advice at reduced costs, global populations gain access to services historically available only to affluent segments. At the very least, personal AI assistants may proactively help individuals avoid pitfalls, like agreeing to unfair terms and conditions or making other mistakes. 

Healthcare confronts similar pressures, as AI diagnostic capabilities match human specialists in pattern recognition and medical imaging. Drug discovery acceleration and treatment protocol optimization are advancing rapidly. While elements like nursing would be difficult to replace, healthcare administration, an area that has rapidly outpaced other spend areas, and some services of primary care physicians, such as helping coordinate next best steps and quarterbacking the navigation of the healthcare system, could face displacement. 

For investors, the critical framework remains the distinction between technological capabilities and adoption timelines. Robotic and AI capabilities will advance rapidly. Implementation across sectors will occur at different speeds based on:

• Regulatory environments
• Economic incentives
• Social acceptance levels

Companies within the ROBO Global Robotics & Automation Index (ROBO B-) and the ROBO Global Artificial Intelligence Index (THNQ C+) represent strategic exposure to labor’s transformation. A few key investment categories and examples of participating companies are shown below:

Physical Automation Leaders include humanoid robot developers, automated manufacturing systems (Koh Young, ROBO), and logistics solutions (Symbotic, ROBO).

AI Service Enablers focus on legal AI systems, healthcare AI diagnostics (Tempus AI, THNQ), and professional services automation (Mercadolibre, THNQ). 

Infrastructure Providers supply computing power, connectivity solutions (Cloudflare, THNQ), and support system development and resilience (Crowdstrike, THNQ).

While certain job categories face displacement, technology simultaneously creates new possibilities for human creativity, innovation and empowerment. This represents a multi-decade investment theme with substantial return potential.

The labor transformation contributes to:

• Global productivity advancement
• Quality of life improvements
• Economic growth acceleration

The ROBO and THNQ indexes represent diversified exposure to technologies that are reshaping global labor markets. 

To learn more, watch our June 5 webcast, “The dynamic trends shaping robotics, AI, and healthcare.” Replay available here.

ROBO is the underlying index for the ROBO Global Robotics & Automation ETF (ROBO). THNQ is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ).

For more analysis, visit our Disruptive Technology Channel and the Artificial Intelligence Channel._

VettaFi is the index provider for ROBO ETF and THNQ ETF, for which it receives an index licensing fee. However, ROBO ETF and THNQ ETF are not issued, sponsored, endorsed, or sold by VettaFi. VettaFi and its affiliates have no obligation or liability in connection with the issuance, administration, marketing, or trading of ROBO ETF and THNQ ETF.