For the past few years, the most direct way to invest in artificial intelligence has been to back the companies building it. Chipmakers, cloud providers, and the biggest technology firms have captured the bulk of investor attention and, in many cases, delivered spectacular returns. But as the AI trade matures, a growing number of investors are asking a different question: where can you still find shelter from the AI wave?
The answer, some argue, lies not with the builders but with the users. There is a group of businesses further down the chain that can harness AI to become more efficient, smarter, and more profitable—without being steamrolled by it. These are companies that would be tough for AI to disrupt, yet still have plenty to gain from better software, automation, and decision-making. For anyone trying to diversify their AI exposure, that combination is worth a closer look.
What has changed about the AI trade?
The first phase of the AI boom was straightforward: buy the picks and shovels. Semiconductor makers, data-center operators, and cloud platforms saw demand surge as tech giants raced to build the infrastructure needed to train and run large language models. That trade has been hugely rewarding, but it has also become crowded. Valuations have stretched, and the market is increasingly sensitive to any sign that AI spending might slow.
Meanwhile, the technology itself is becoming more accessible. AI tools are no longer the exclusive domain of a handful of tech giants. Smaller companies can now plug into AI-powered services, automate routine tasks, and improve decision-making without building their own models. That shift is opening up a second wave of opportunities—not for the companies selling the shovels, but for the ones using them to dig more efficiently.
What makes a business 'AI-proof'?
The idea of an 'AI-proof' stock can sound like a contradiction. After all, AI is expected to touch nearly every industry. But the key is not avoiding AI altogether; it is finding businesses that are hard to disrupt while still being able to benefit from the technology.
Typically, these are companies with strong moats—things like brand loyalty, regulatory barriers, high switching costs, or physical networks that are difficult to replicate. A regional utility, a diversified industrial, or a healthcare provider with deep patient relationships are examples of businesses that AI is unlikely to replace. Yet each of them can use AI to optimize operations, reduce costs, or improve customer service.
Consider a logistics company. AI can help it optimize delivery routes, predict maintenance needs, and manage inventory more efficiently. But the company's real value lies in its fleet, its depots, and its contracts—assets that a software model cannot easily reproduce. The same logic applies to banks, insurers, and even traditional retailers. AI can make them better, but it won't make them obsolete.
How to spot the sweet spot
Investors looking for this sweet spot should focus on a few key characteristics. First, look for businesses with a clear competitive advantage that is not based on data or software alone. Second, check whether management is actively investing in AI tools to improve operations—not just talking about it. Third, consider whether the company has the scale to deploy AI effectively across its operations.
It is also worth remembering that the AI trade is not just about technology stocks. Foreign investors have returned to Asian stocks on AI optimism, but the opportunity is broader. Even in sectors like energy or materials, companies are using AI to improve exploration, reduce waste, and manage supply chains. The key is to find businesses where AI is a tool, not a threat.
What it means for investors
For everyday investors, the shift toward AI users rather than builders offers a way to diversify. Instead of piling into the same handful of mega-cap tech names, you can look for companies in other sectors that are quietly adopting AI to improve their margins. That approach can reduce concentration risk and provide exposure to AI's benefits without the same level of volatility.
It is also a reminder that not every AI winner will be a tech company. The businesses that thrive may be the ones that use AI to do what they already do well, only better. As the technology becomes more widespread, the competitive advantage may shift from those who build AI to those who apply it most effectively.
Of course, no investment is without risk. AI could still disrupt industries in ways that are hard to predict. But for investors looking to balance their portfolios, the 'AI-proof' approach offers a sensible middle ground: companies that are resilient to disruption, yet positioned to benefit from the very technology that is reshaping the economy.
As always, it pays to do your own research and consider how any investment fits into your broader financial plan. The AI trade is far from over, but the next chapter may be written by the companies that use it wisely, not just the ones that build it.
