BlackRock, a prominent investment management firm, predicts that infrastructure and cybersecurity sectors will thrive in 2025, fueled by the rise of artificial intelligence (AI). Jay Jacobs, BlackRock’s lead for thematic and active exchange-traded funds (ETFs) in the US, believes we are in the early stages of AI adoption.

In an interview with CNBC’s “ETF Edge”, Jacobs shared his insights on the future of AI and investment strategies. He pointed out that AI companies need to expand their data centers. Moreover, safeguarding this data is a wise investment strategy for the upcoming year.

“As your data becomes more valuable, you should be willing to invest more in cybersecurity,” Jacobs elaborated. “We predict that the cybersecurity and software sectors, which are experiencing fast revenue growth due to AI, will greatly benefit from this.”

Furthermore, Jacobs noted the broader implications for the supporting infrastructure. He emphasized that while technology may seem magical, it relies on physical entities like power, data centers, real estate, and chips. This requires energy and materials like copper, and more real estate, highlighting the importance of the physical infrastructure supporting it.

Jacobs encourages investors to broaden their investment horizons. He suggested, “It’s not just about big tech names. There are other semiconductor companies, data center companies, and software companies benefiting from the rise of this theme.”

He mentioned BlackRock’s iShares Future AI & Tech ETF (ARTY) and iShares AI Innovation and Tech Active ETF (BAI) as potential investment vehicles to profit from the AI surge. The iShares Future AI & Tech ETF has seen a 13% increase this year, while the iShares AI Innovation and Tech Active ETF has risen about 13% since its launch on October 21, as of the closing on Friday.