Hive Digital chair: AI is 'rebuilding our military in every aspect'

Frank Holmes has a habit of seeing opportunities before the market does. He launched the world's first publicly listed Bitcoin mining company in 2017. Now he's betting that AI's role in national defense is the next major theme hiding in plain sight.

Holmes serves as Executive Chairman of Hive Digital Technologies and CEO of U.S. Global Investors, the firm behind two thematic ETFs — SEA (U.S. Global Sea to Sky Cargo ETF) and WAR (U.S. Global Technology and Aerospace & Defense ETF).

Both ETFs were born directly from lessons learned running a Bitcoin mining operation. Both are already delivering for investors.

Connecting dots backward to see forward

"You can't really connect the dots to the future, but you can look back and connect the dots, then it helps you predict your future, and you'll make better decisions."

For Holmes, those dots run from shipping containers carrying Bitmain mining equipment, to air cargo moving GPU chips, to Nvidia, to AI, and now to defense. Each business led to the next investment thesis.

Breaking down SEA

In Hive's early days, Holmes noticed that all of the company's mining equipment was moving via cargo ships and all of its GPU chips were moving via air freight. He followed that thread and discovered that roughly 80% of global trade flows through sea and air arteries — a massive and underserved investment theme.

The result was the SEA ETF, which uses AI to rebalance its holdings across marine shipping and air freight companies every quarter.

"SEA far outperformed the S&P 500. The tariff (war), the cost of all that, it's been a great benefit. It outperformed the S&P by two to one last year."

SEA is up roughly 20% year-to-date and over 30% over the last 12 months.

Breaking down WAR

The same GPU chips that powered Hive Digital's Ethereum mining operation introduced Holmes to the Nvidia ecosystem — and from there, to the broader AI buildout.

"We were lucky mining Ethereum, because Ethereum was GPU chips, and the GPU chips taught me about Nvidia chips, which allowed me then to pivot (when Ethereum merged) to take my chips to AI."

He saw that AI was being deployed across every branch of the military and launched the WAR ETF to give investors direct exposure to the defense companies at the center of that rebuild. The fund covers aerospace and defense, semiconductors, cybersecurity, data centers, and homeland security.

"AI is being used to rebuild our military in every aspect of our military. We are seeing AI in the application for national security."

WAR is up roughly 27% year-to-date and over 50% over the last 12 months.

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The Maduro operation as proof of concept

Holmes pointed to the January 2026 capture of Venezuelan leader Nicolás Maduro as the clearest evidence that AI has already changed the nature of military operations. U.S. forces captured Maduro in an operation that lasted less than 30 minutes. Holmes contrasted that with the 1989 capture of Panama's Manuel Noriega, which took weeks and cost 23 American lives.

"When we went and captured Maduro, not one American was killed. When they went and captured Noriega in 1989, there were 23 Americans killed."

It's worth noting that seven U.S. service members were injured during the Maduro operation, and Venezuelan officials reported over 100 casualties on their side. But Holmes's broader point stands: the operational precision enabled by AI-driven intelligence, targeting, and coordination is a generational shift in how military force is projected.

How much of the defense sector's AI upside is still unpriced?

For retail investors, the takeaway is that AI is not a future story. It is already reshaping defense, trade, and capital markets in real time.

Palantir, which provides AI software to the U.S. military, has had a meteoric rise over recent years, climbing several hundred percent through the 2020s. But Palantir is one company. Holmes's thesis is that the entire defense sector is being re-architected around AI — and most of that upside hasn't been priced in yet.

The same instinct that led Holmes to build the first public Bitcoin miner has now produced two ETFs with a track record of outperforming the S&P 500 in some of the most volatile market conditions in recent memory. SEA is up over 30% in 12 months. WAR is up over 50%.

If AI is already deciding the outcome of military operations, how much of the defense sector's AI upside is the market still missing?