Global assets in AI and big data funds have surged more than sevenfold in five years, hitting $38.1 billion by the end of Q1 2025, according to a report from data provider Morningstar.
Europe has emerged as the largest market, accounting for nearly two-thirds of global assets.
Morningstar’s report highlighted that European fund assets in the AI and big data ( funds focus on firms using advanced data analytics and infrastructure to extract value from massive datasets) space have grown fivefold since 2019, reaching USD 22.7 billion by the end of May 2025. The growth has been driven by investor appetite for exposure to transformative technologies, despite elevated volatility and sector concentration risks.
Q1 2025 saw record global inflows into AI and big data funds, bolstered by retail and institutional interest in China following the success of DeepSeek, an emerging domestic AI leader. The momentum reflects enthusiasm around the commercialisation of AI, but Morningstar cautioned that investor expectations should be managed carefully.
The Morningstar Global AI & Big Data Consensus Index has outperformed the broader Morningstar Global Target Market Exposure Index by 35% since the launch of ChatGPT 3.5 in late 2022. However, this outperformance has come with steeper drawdowns, reflecting the high-risk nature of early stage tech investing.
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Despite Europe’s asset dominance, nearly all of the most frequently held AI and big data stocks are US-listed and domiciled—led by the “Magnificent Seven” – the seven leading tech stocks that include Microsoft and Meta. This concentration could make it harder for fund managers trying to build regionally diversified AI exposure and for selectors aiming to balance thematic bets within wider portfolios, according to the researchers.
Thematic investing in AI requires more nuanced due diligence, Morningstar shared. Simply buying into the trend has historically led to mixed results, and investors are better served by valuation-aware, contrarian strategies rather than chasing hype.
Kenneth Lamont, principal for manager research at Morningstar, commented: “It’s hard to overlook the dominance of the ‘Magnificent Seven’ among the most widely held stocks. In fact, of these names, only Tesla was held by fewer than half of the AI & big data portfolios. Meanwhile, Nvidia appeared in nearly nine out of every ten AI and big data funds. While the long-term impact of AI is widely recognised, the leaders of today may not hold their positions tomorrow. For example, Nvidia’s stock price tumbled in early 2025 when valuation assumptions were challenged after the emergence of Chinese start-up DeepSeek, illustrating how quickly the landscape can shift.
AI and Big Data funds have grown significantly in number and size. Yet, their definitions of the AI theme vary greatly, leading to diverse strategies and performance outcomes. This inconsistency poses a challenge for investors seeking precise, targeted exposure to AI.”
