Exchange Traded Concepts and xETFs Launch NECK, an ETF Targeting the Critical Constraints Shaping AI Growth

Actively managed xETFs AI Bottlenecks ETF focuses on memory, networking, power, compute and other areas where demand may be outpacing supply

Exchange Traded Concepts, LLC (“ETC”), a leading provider of white-label ETF solutions, and WallStreetX ETFs, Inc., doing business as xETFs, announced the launch of the xETFs AI Bottlenecks ETF.

NECK is an actively managed ETF that seeks to invest in companies positioned around critical constraints within the artificial intelligence ecosystem. The fund focuses on areas where supply may not be keeping pace with demand, pricing power may be shifting, or companies hold positions that are difficult to replicate and where the investment team believes those dynamics may create investment opportunities.

The continued development of AI depends on more than software and algorithms. Expanding the technology requires significant investment in memory, connectivity, computing capacity, power, cooling and data-center infrastructure. NECK is designed to identify companies operating at these physical and technological pressure points as the AI ecosystem develops.

“Artificial intelligence is creating investable opportunities across an increasingly complex infrastructure ecosystem,” said Garrett Stevens, Chief Business Officer and co-Founder of Exchange Traded Concepts. “NECK is designed to look beyond the most visible AI names and focus on the infrastructure and component constraints that may influence how and how quickly the industry can scale.”

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The fund’s investment process evaluates companies across several areas of the AI ecosystem, including:

• Memory
• Optics, photonics and networking
• Power and infrastructure
• Semiconductors and compute
• Emerging constraints that may develop as AI technologies and adoption evolve

Companies may be evaluated based on the severity and durability of a supply-demand imbalance, the economic significance of the constraint, pricing power and valuation, as well as competitive positioning and other factors consistent with the Fund’s investment process.

“The AI buildout can only move as quickly as its scarcest inputs allow,” said Johnny Wu, Founder and CEO, xETFs. “Those constraints will not remain fixed. Some may ease, others will migrate and new ones may emerge as the technology develops. NECK was designed as an actively managed strategy to identify those shifts and adjust the portfolio periodically as the opportunity set changes.”

Rather than seeking broad exposure across the AI value chain, NECK is designed to focus on businesses operating in the infrastructure and component layers that support AI deployment and expansion. Its active approach is intended to allow the portfolio to rebalance over time as market conditions and industry bottlenecks evolve, consistent with the Fund’s investment process.