Invest in AI Value Chain or Just Ignore it?

Though institutional and retail investors alike are investigating opportunities in artificial intelligence outside the venture capital area, iit often is hard to target such investment since the AI value chain is so broad. To some extent, the advice to invest in firms and sectors you would choose for other reasons seems logical enough, especially if one believes AI will eventually affect every industry. 

Of course, some segments of the AI value chain have been more obvious direct participants. Nvidia’s graphics processing units, for example, have driven its equity value in recent years. The “AI as a service” providers including AWS, Azure and Google also have been early investor “infrastructure” or “picks and shovels” favorites. 

Value Chain Segment	Estimated Value Creation (%)	Example Public Companies	Explanation
AI Chips & Hardware	~15%	Nvidia, Intel, AMD	Specialized semiconductors and hardware accelerators power AI computations. Their performance improvements drive overall AI efficiency and capability.
Cloud & Data Infrastructure	~30%	Amazon (AWS), Microsoft (Azure), Alphabet (Google Cloud)	Scalable computing, storage, and data processing services form the backbone of AI deployment. They enable vast data collection and processing at scale.
Core AI Software & Tools	~20%	Alphabet (TensorFlow), Microsoft (Cognitive Services), IBM (Watson)	AI frameworks, libraries, and algorithm platforms that underpin model development, training, and deployment across various industries.
AI Applications & End-User Solutions	~35%	Salesforce (Einstein), Adobe (Sensei), Meta Platforms, Tesla	Direct consumer and enterprise applications—ranging from recommendation engines and personalized marketing to autonomous vehicles—that capture final user value.

But the issue is that if AI is a general-purpose technology, it will affect virtually all industries. So one way of looking at investment is simply to put money where you think growth or dividends are, depending on one's investing perspective, and ignore AI, assuming it will become part of the value of every product and every industry.