Semiconductors could be the most efficient play for artificial intelligence.

According to VanEck's CEO, the most effective way to capitalize on the artificial intelligence surge may be through investing in semiconductors.

This week, on CNBC's "ETF Edge," Jan van Eck stated that semiconductors are now the core of the AI industry.

As of Wednesday's close, his firm's stock, which tracks 25 of the largest chipmakers in the country, has increased by 21% this year. However, SMH has decreased nearly 6% this month, primarily due to the decline in the performance of and .

Despite its 70% increase in shares this year due to high demand for its AI processors, the fund's top holding has decreased by 7% since the beginning of the month.

AI chips' high interest could provide the group with long-term profits, according to Van Eck, who believes the weakness is only temporary.

Van Eck stated that the business has shifted from being highly cyclical with short product lives to being part of the growth trade, resulting in more recurring revenue, allowing them to maintain high profitabilities even in the face of short-term challenges.

Mike Akins, a founding partner of ETF Action, believes that limited competition for certain chipmakers' products can sustain the group.

"He stated in the interview that your high moat allows you to control pricing, but if competition intensifies in this space, it may become difficult to maintain that trade without pricing pressure."

As a predictor of future performance, Akins suggests that investors should closely monitor semiconductor fund flows.

"It is advisable to view flows as a contrarian indicator, as depressed flows may present an opportunity to buy, and extended flows may signal the need to pare down."