As the artificial intelligence (AI) investing conversation shifts from enablers to adopters, there’s considerable focus on adoption in the private sector. With that comes concerns about how much capital publicly traded companies are willing to deploy on AI.
It’s a relevant concern. After all, astute shareholders scrutinize all the ways the companies they’re invested in spend money. The same should be true of the federal government, but the reality is different. Sounds ominous, but it could actually be a positive for AI-related exchange traded funds such as the Invesco QQQ Trust (QQQ ) and the Invesco NASDAQ 100 ETF (QQQM ).
AI could have a plethora of applications for the federal government – an entity not known for innovation or efficiencies. The emerging technology could also be prominent in bolstering defense and national security. That could provide new outlets for AI adoption, potentially boosting some QQQ/QQQM holdings along the way.
Defense Department Embracing AI
The Department of Defense (DOD) is embracing AI. This may improve combat readiness and put more resources in the hands of troops on the ground. DOD’s Transition Tracking Action Group is tackling those objectives.
“The group “represents a new approach to technology portfolio management that leverages advanced data analytics and artificial intelligence to provide DOD officials with the insights [they need] to make informed, innovative decisions,” said Cyrus Jabbari, the chief data officer to the Under Secretary of Defense for Research and Engineering, in a statement.
The Transition Tracking Action Group could also leverage AI and big data to help DOD reduce duplication and wasteful spending. These issues have long plagued large government agencies. One way of looking at the scenario is that some QQQ/QQQM holdings could play roles in saving taxpayers money.
There are already signs that some redundancies are being eliminated and cost efficiencies are being realized. This indicates AI adoption is paying dividends for the Defense Department. That could set the stage for a broader embrace of AI at the federal level over the long-term.
“The applications will mature to give senior leadership more visible, accessible, understandable and secure data analytics tools to assist in making informed decisions," Jabbari said. "These tools are already reducing the burden, costs and errors of manual data calls and empowering DOD to discover information quickly, with high fidelity, and communicate it effectively. Transparency and visibility will undoubtedly enhance our ability as a department and as a nation to create and field capabilities at speed and scale.”
For more news, information, and analysis, visit the ETF Education Channel.
