Is Pure AI Trading Outdated? Wall Street Eyes the Next GPT Moment: The Rise of Sci-Fi ETFs

TradingKey - After more than two years of red-hot momentum, AI-driven trading is now facing questions over its long-term commercial viability. According to Bloomberg, Wall Street is turning to the ETF market in search of the next frontier in technology investing — one that could include humanoid robots, UFOs, and quantum computing, under a new category dubbed “Sci-Fi ETFs.”

Bloomberg ETF analyst Athanasios Psarofagis noted that investment themes in the ETF space evolve rapidly. While AI has enjoyed tremendous success, the space is now crowded with similar products. The new race is on to find the next transformative investment theme. Some may sound unrealistic today, but niche areas can sometimes become successful models.

As of now, the U.S. ETF market includes more than 4,200 funds, managing a total of $11 trillion. To survive in this fiercely competitive landscape, innovative themes are increasingly in demand.

From both China and the U.S., humanoid robots powered by AI technology are becoming a reality, as investors place growing bets on the promising future of physical AI. Industry insiders say the humanoid robot space is a very narrow but compelling niche — and worth exploring.

Earlier this month, KraneShares launched the KOID fund focused on humanoid robotics companies, while RoundHill is preparing to roll out a similar ETF.

RoundHill’s CEO said that with the convergence of artificial intelligence and humanoid robotics, this theme could begin to take shape within the next six months. Tesla CEO Elon Musk, for instance, expects thousands of Optimus robots to be operating in Tesla factories by the end of 2025.

Some professionals argue that as physical AI models continue to break through, we are approaching the “GPT moment” for humanoid robots — the next major event following generative AI.

They believe humanoid robots are not as far from reality as flying cars or even quantum computing. In China, such robots have already started entering the market and will soon make their way to the U.S.

Quantum computing is also gaining increasing attention among ETF providers. Even NVIDIA CEO Jensen Huang has changed his tone on the technology, stating that quantum computing is nearing an inflection point.

Defiance’s QTUM ETF has attracted more than $600 million in inflows so far this year, with assets rising 11%, while leading quantum computing stock IONQ has surged 440% over the past year.

Some ETF issuers are even eyeing the space age. For example, Matt Tuttle is pushing forward with an AI-powered UFO-themed ETF, seeking potential extraterrestrial technologies hidden in defense contractors’ R&D labs.

However, given that concepts like the metaverse and psychedelic therapy rose and faded in previous years, industry players remain cautious about some of these new themes. In reality, very few ETF themes have achieved the kind of lasting popularity seen with the internet or digital assets.