Everywhere you look, this period of rapid technological expansion (i.e. the growth of artificial intelligence, humanoid robots, and autonomous vehicles) is compared to the late-1990s dot-com bubble. This period was defined by speculative valuations, weak business models, and an eventual collapse. That framing is comfortable, as it feels familiar to the majority of investors today, but we believe it’s actually incorrect. This narrative is not only stuck in the wrong decade, it’s actually stuck in the wrong century. And perhaps more importantly, it is resulting in a poor framing of the fundamentals.
If we zoom out past the last 30 years and look at tech advancement through a historical lens, today’s technological breakout has far more in common with the Second Industrial Revolution, which occurred in the late-1870s to early-1910s, than with the late-1990s/early-2000s internet bubble.
Why is this the case? Because we are currently in a full-stack technological transformation touching energy, labor, manufacturing, transportation, communications, and compute infrastructure. Much in the same way electricity, railroads, mass production, and telecommunications re-architected the global economy in the late 19th century.
And when you analyze today’s economy through that lens, the implications for markets, labor, and long-term growth look very different from the dot-com analogy.
The Second Industrial Revolution unfolded as a cluster of breakthrough technologies hit the economy all at once: electricity, railroads, the telegraph (soon to be telephone), and internal combustion engine (which led to early automobiles as well as mass manufacturing).
What was most important to the economy was that these innovations were not standalone. They worked in synergy and reinforced one another, creating new industries, expanding national markets, and fundamentally changing how people lived, worked, and consumed. The result was a half-century of rising productivity, rapid urbanization, new labor structures, and extraordinary capital formation.
We currently have three generational technologies coming to market: artificial intelligence (AI), humanoid robotics, and autonomous vehicles (AVs).
Similarly to the 19th century, each one of these technologies is strong on its own, but together they will dramatically change the economy.
This is where comparing today’s boom to the dot-com bubble misses the mark: in the scale of impact. The 2000s were primarily about information, communication, and digital business models. Today’s wave touches the real, physical economy of factories, energy, transportation, physical goods, and labor itself, a transformation at the scale of electricity and railroads.
The 19th century economy required unprecedented investment to build power grids, rail networks, factories, and telegraph lines. The expansion of modern financial markets within corporate debt and public equity listing helped supply this capex. It also led to the first “blue chip” stocks. Railroads and electric companies were the blue chips of the early 20th century, and their dividends and earnings shaped portfolios for decades.
As we know, today’s frontier technologies demand enormous capital outlays in the form of data centers, manufacturing lines for robotics, power infrastructure, et cetera. BlackRock recently noted that we are entering a period of “structural supply constraints” in compute, power, and infrastructure, and that capex could remain elevated for decades.1
Technological change always reshapes the labor market, but today’s scale of restructuring echoes the late 19th century.
So what happened in the past? To put it generally, the division of labor. Skilled labor (for the time) became dramatically more valuable as factory work displaced agricultural labor. Wage inequality widened, which began to feed income inequality in the United States. Additionally, new professions emerged in the form of engineers, machinists, telegraph operators.
How does that compare to the outlook for labor markets today? We have already witnessed that AI and robotics are increasing the wage premium on technical, engineering, and data-driven skills.
Humanoid robots and AI copilots are likely to do for physical and routine cognitive tasks what the steam engine and electric machines did for many roles in manufacturing. They will raise productivity while reshuffling and downsizing labor needs through automation.
On the upside, we will see new labor segmentation and opportunity across robotics operations, AI training, and automation management.
While the Second Industrial Revolution marked an era of extraordinary growth, it also came with extraordinary volatility. Bank runs, asset booms, and industrial consolidation led to multiple recessions. This was in large part due to a lack of regulation in the expansion of credit and emergence of monopolies. In 1913, the Federal Reserve was created, followed by subsequent antitrust action.
While the Fed and substantially more regulation exist in today’s market, parallels can still be drawn. We see them in the current AI market concentration, the battle for compute scale, and the near-vertical capex cycle. This much concentration of capital in the market results in heightened volatility. The best advice for investors? Hold on and invest opportunistically.
If the Second Industrial Revolution built the world of electrified industry, mass production, and national markets, then today’s revolution is building the world of autonomous systems, distributed compute, and intelligent machines.
For investors, the task is not to guess which highly speculative startup wins. It is to identify the next generation of infrastructure companies: those supplying and scaling generative AI, building humanoid robots, and automizing the backbone of the 21st century. This is not an easy task as the “winners” are not always clear and the story is constantly changing, which underscores the need for actively managing your portfolio or choosing an actively managed ETF.
Roundhill actively manages ETFs within each of these innovative technologies. The Roundhill Generative AI & Technology ETF (CHAT) provides targeted exposure to artificial intelligence. The Roundhill Humanoid Robotics ETF (HUMN) holds positions in the companies developing and producing humanoid robots, as well as their critical suppliers.
In the last month, Roundhill rounded out their coverage of today’s tech stack with the launch of the Roundhill Robotaxi, Autonomous Vehicles, and Technology ETF (CABZ) which offers exposure to companies in the robotaxi and autonomous vehicles space.
Consider one or diversify your exposure across all three for an active investment in today’s technologies.
1BlackRock Investment Institute, 2026 Global Outlook
Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about Roundhill ETFs please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/. Read the prospectus or summary prospectus carefully before investing.
CHAT Risks:
Artificial Intelligence Company Risk. Companies involved in, or exposed to, artificial intelligence related businesses may have limited product lines, markets, financial resources or personnel. These companies face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing the consumer base of their respective products and services.
Technology Sector Risk. The Fund will invest substantially in companies in the information technology sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments. The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs.
Small-Capitalization Investing. The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole.
Micro-Capitalization Investing. Micro-capitalization companies often have limited product lines, narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies, including companies which are considered small- or mid-capitalization.
Concentration Risk. The Fund will be concentrated in securities of issuers having their principal business activities in the technology group of industries. To the extent that the Fund concentrates in a group of industries, it will be subject to the risk that economic, political, or other conditions that have a negative effect on that group of industries will negatively impact them to a greater extent than if its assets were invested in a wider variety of industries.
CHAT is distributed by Foreside Fund Services, LLC.
HUMN Risks:
Humanoid Robotics Companies Risk. The Fund invests in Humanoid Robotics Companies, which may have limited product lines, markets, financial resources, or personnel and are subject to the risks of changes in business cycles, world economic growth, technological progress, and government regulation. These companies are also heavily dependent on intellectual property rights, and challenges to or misappropriation of such rights could have a material adverse effect on such companies. Securities of Humanoid Robotics Companies tend to be more volatile than securities of companies that rely less heavily on technology. Humanoid Robotics Companies typically engage in significant amounts of spending on research and development, and rapid changes to the field could have a material adverse effect on a company's operating results. Additionally, the development and commercialization of fully-functional humanoid robots involve complex and evolving technologies, which may face unforeseen technical challenges, regulatory hurdles, and market acceptance issues. As a result, investments in Humanoid Robotics Companies may be subject to higher levels of risk and volatility.
Consumer Discretionary Sector Risk. Consumer discretionary companies, such as retailers, media companies and consumer services companies, provide non-essential goods and services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies is tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. Success depends heavily on disposable household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer discretionary products in the marketplace.
Emerging Markets Risk. The Fund’s investments in China may be subject to a greater risk of loss than investments in more developed markets. Emerging markets may be more likely to experience inflation, political turmoil and rapid changes in economic conditions than more developed markets. Emerging markets often have less uniformity in accounting and reporting requirements, unreliable securities valuation and greater risk associated with custody of securities.
Information Technology Companies Risk. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the information technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies. Information technology companies are facing increased government and regulatory scrutiny and may be subject to adverse government or regulatory action.
Concentration Risk. The Fund is concentrated in the industry or group of industries comprising the industrials, information technology and consumer discretionary sectors, collectively. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund’s investments more than the market as a whole, to the extent that the Fund’s investments are concentrated in the securities and/or other assets of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector, market segment or asset class.
New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.
Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.
CABZ Risks:
Robotaxi, Autonomous Vehicles and Technology Companies Risk. Robotaxi, Autonomous Vehicles and Technology Companies may be adversely affected by government spending policies and permitting regimes because they often rely, to a significant extent, on public‑sector demand, approvals and infrastructure. Other risks for these industries include evolving regulation and safety standards, product liability and regulatory investigations following incidents, supply chain constraints and export controls on critical semiconductors, cybersecurity and data privacy incidents, outages or service changes by cloud or communications providers, competition, rapid technological change, intellectual property disputes, geopolitical instability, financing constraints and shortages of skilled labor, among other things. Robotaxi, Autonomous Vehicles and Technology Companies may face challenges related to the obsolescence of existing systems and equipment as well as unexpected risks and costs from technological developments, such as autonomous driving, ADAS and AI.
Emerging Markets Risk. The Fund’s investments in China may be subject to a greater risk of loss than investments in more developed markets. Emerging markets may be more likely to experience inflation, political turmoil and rapid changes in economic conditions than more developed markets. Emerging markets often have less uniformity in accounting and reporting requirements, unreliable securities valuation and greater risk associated with custody of securities.
China Risk. The Fund may invest in instruments that provide exposure to Chinese companies, including through investments in China A-Shares, which would subject the Fund to risks specific to China. China may be subject to considerable degrees of economic, political and social instability.
Consumer Discretionary Sector Risk. Consumer discretionary companies, such as retailers, media companies and consumer services companies, provide non-essential goods and services. These companies manufacture products and provide discretionary services directly to the consumer, and the success of these companies is tied closely to the performance of the overall domestic and international economy, interest rates, competition and consumer confidence. Success depends heavily on disposable household income and consumer spending. Changes in demographics and consumer tastes can also affect the demand for, and success of, consumer discretionary products in the marketplace.
Industrials Sector Risk. The value of securities issued by companies in the industrials sector may be adversely affected by supply and demand changes related to their specific products or services and industrials sector products in general. The products of manufacturing companies may face obsolescence due to rapid technological developments and frequent new product introduction. Global events, trade disputes and changes in government regulations, economic conditions and exchange rates may adversely affect the performance of companies in the industrials sector. Companies in the industrials sector may be adversely affected by liability for environmental damage and product liability claims. The industrials sector may also be adversely affected by changes or trends in commodity prices, which may be influenced by unpredictable factors. Companies in the industrials sector, particularly aerospace and defense companies, may also be adversely affected by government spending policies because companies in this sector tend to rely to a significant extent on government demand for their products and services.
Information Technology Companies Risk. Information technology companies face intense competition, both domestically and internationally, which may have an adverse effect on profit margins. Like other technology companies, information technology companies may have limited product lines, markets, financial resources or personnel. The products of information technology companies may face obsolescence due to rapid technological developments, frequent new product introduction, unpredictable changes in growth rates and competition for the services of qualified personnel. Companies in the information technology sector are heavily dependent on patent and intellectual property rights. The loss or impairment of these rights may adversely affect the profitability of these companies. Information technology companies are facing increased government and regulatory scrutiny and may be subject to adverse government or regulatory action.
Variable Interest Risk. Exposure to VIEs may pose additional risks because the investment is made in reference to an intermediary shell company that has entered into service and other contracts with the underlying Chinese operating company to provide investors with exposure to the operating company, but does not represent equity ownership in the operating company. As a result, such investment may limit the rights of an investor with respect to the underlying Chinese operating company. VIEs allow foreign shareholders to exert a degree of control over, and obtain economic benefits arising from, the operating company without formal legal ownership. However, the contractual arrangements between the shell company and the operating company may not be as effective in providing operational control as direct equity ownership, and a foreign investor's rights may be limited by, for example, actions of the Chinese government which could determine that the underlying contractual arrangements on which control of the VIE is based are invalid. The contractual arrangement on which the VIE structure is based would likely be subject to Chinese law and jurisdiction, which could raise questions about how recourse is sought. Investments through VIEs may be affected by conflicts of interest and duties between the legal owners of the VIE and the stockholders of the listed holding company, which could adversely impact the value of investments. VIEs are not formally recognized under Chinese law and investors face uncertainty about future actions by the Chinese government that could significantly affect the operating company’s financial performance and the enforceability of the contractual arrangements underlying the VIE structure. Prohibitions of these structures by the Chinese government, or the inability to enforce such contracts, from which the shell company derives its value, would likely cause the VIE-structured holding(s) to suffer significant losses, and in turn, adversely affect the Fund’s returns and net asset value.
Concentration Risk. The Fund is concentrated in the industry or group of industries comprising the industrials, information technology and consumer discretionary sectors, collectively. The Fund may be susceptible to an increased risk of loss, including losses due to adverse events that affect the Fund’s investments more than the market as a whole, to the extent that the Fund’s investments are concentrated in the securities and/or other assets of a particular issuer or issuers, country, group of countries, region, market, industry, group of industries, sector, market segment or asset class.
Non-Diversification Risk. As a “non-diversified” fund, the Fund may hold a smaller number of portfolio securities than many other funds. To the extent the Fund invests in a relatively small number of issuers, a decline in the market value of a particular security held by the Fund may affect its value more than if it invested in a larger number of issuers. The value of the Fund Shares may be more volatile than the values of shares of more diversified funds.
New Fund Risk. The Fund is a recently organized investment company with a limited operating history. As a result, prospective investors have a limited track record or history on which to base their investment decision.
Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.