Defiance ETFs has rolled out two new funds that aim to ride the AI wave while dodging the parts of tech that might get washed away. The Defiance US 100 Tech AI Moat ETF (AIX) and the Defiance US 100 Tech Ex Software ETF (XIGV) both start with the Nasdaq-100 universe but then go their separate ways.
AIX is all about finding companies with what the fund calls an "AI moat" — think proprietary data, embedded AI, advanced semiconductors, and critical infrastructure. It screens out firms most vulnerable to AI disruption, then picks the 30 highest-scoring companies based on R&D intensity, AI business exposure, and verifiable AI investment. The result is a portfolio heavy on semiconductor stocks, capped at 4.9% per holding, rebalanced twice a year.
XIGV takes a more direct approach: it simply excludes software companies. The fund removes any firm that gets 50% or more of its revenue from software — including application software, system software, cloud infrastructure, cybersecurity, and IT services. What's left is a basket of semiconductor, hardware, and connectivity companies. Defiance markets it as the first U.S.-listed ETF to target the Nasdaq-100 while ditching software entirely.
The logic? Generative AI and AI agents could eat traditional software business models by automating coding, workflows, and features that have long supported subscription revenues. Better to own the picks and shovels — the chips and infrastructure — than the companies that might get disrupted by their own creations.
Both funds launched today, and AIX is holding steady in early trading. For investors looking beyond the headline AI winners, these ETFs offer two distinct ways to bet on the hardware side of the AI supercycle.
