Following ChatGPT Announcement, These Artificial Intelligence Focused ETFs Show Strong Gains

Microsoft Corp MSFT backed OpenAI's ChatGPT chatbot, which grabbed the attention of the global tech sector in early 2023, adept at answering questions and writing essays and poems, and image generator Dall-E 2, which turns language prompts into novel images.

The AI industry almost triggered a battle among the big tech companies like Microsoft and Alphabet Inc GOOG GOOGL Google in their bid to outdo each other. It mainly came when companies were busy downsizing their workforce and shelving projects and real estate presence amid macro uncertainties.

The ETFs with significant exposure to the ChatGPT stocks made handsome gains year-to-date.

SPDR Select Sector Fund - Technology XLK, iShares Global Tech ETF IXN, and Fidelity MSCI Information Technology Index ETF FTEC gained ~20% YTD. The ETFs gained 15%-18% in the last six months and 5% the previous month.

The ETFs have 18%-24% exposure to Microsoft, 22%-23% exposure to Apple Inc AAPL, and 5%-6% exposure to Nvidia. Apple maintained a low profile in terms of its ChatGPT ambitions.

Analysts touted Nvidia Corp NVDA as a critical gainer from the ChatGPT wave.

Microsoft's new AI additions to its Bing search engine bore mixed results in February. Colossal AI search costs posed as additional headwinds

Last week, OpenAI made ChatGPT capable of web browsing.

This week, China's Baidu Inc BIDU dumped the highly-anticipated public launch of its ChatGPT-like product, Ernie Bot

Baidu's cancellation came weeks after founder Robin Li disappointed by marking Ernie Bot's debut via recorded video instead of a real-time demo.

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