Artificial intelligence and robotics are fundamentally reshaping the real estate industry value chain, from design and construction to operations and usage patterns. This transformation represents an opportunity for investors seeking exposure to the convergence of technology and physical assets.

This report examines how AI is impacting real estate from two crucial perspectives: 1) physical world transformation and automation; and 2) AI enablers and applications. Public companies discussed are constituents of the ROBO Global Robotics and Automation Index (ROBO) and/or the ROBO Global Artificial Intelligence Index (THNQ).

AI in Design and Planning for Real Estate

AI is revolutionizing architectural design, space utilization, energy efficiency, materials science simulation and optimization, and urban planning through advanced simulation capabilities. Urban planners and architects globally are using AI-based simulation to create “digital twins” of cities. This allows them to test how design choices affect traffic flow, sunlight, wind, and energy usage before anything is built.

For example, Autodesk’s (ADSK) Oslo-based Spacemaker platform leverages cloud AI for optimizing site plans for neighborhoods and buildings. Architects and developers are able to “test design concepts in minutes.” This generative AI approach helps professionals make better early-stage design decisions and maximize long-term project sustainability?.

By processing massive datasets (geospatial data, climate patterns, zoning rules, etc.), AI can quickly and efficiently uncover design solutions that balance aesthetics, cost, and environmental goals. AI-backed approaches far surpass manual methods.

AI and Robotics Transforming Construction

At the construction site itself, AI and robotics are beginning to dramatically transform building processes that are labor-intensive and dangerous. We are seeing the emergence of semiautonomous and autonomous machines that can augment or even replace certain onsite activities. Drones and agile ground robots, equipped with AI, are handling tasks like surveying, site inspection, and progress monitoring.

Beyond inspection, AI-enabled robots are directly performing construction tasks. Autonomous or semiautonomous heavy equipment is a fast-evolving reality. Bulldozers, excavators, and cranes are being outfitted with AI guidance systems to perform groundwork with minimal human input.

Building Operations, Analytics, and Energy Management

After construction is complete, AI continues to add value over a building’s operational life. Modern building management systems (BMS) are incorporating AI algorithms to turn ordinary facilities into “smart buildings.” Sensors and IoT devices embedded throughout a building can feed real-time data on occupancy, temperature, air quality, lighting levels, equipment status, and more into cloud-based AI platforms.

For example, companies like Samsara (IOT) provide a Connected Operations Cloud that allows organizations with physical assets (buildings, factories, vehicle fleets) to harness IoT data for actionable insights.

Safety and security are another major aspect of building operations AI is enhancing. Traditional security cameras produce a flood of footage that is impractical for humans to monitor in real time. AI computer vision now can analyze video feeds for threats or issues. Specialized vision-processing chips from companies like Ambarella (AMBA) enable cameras to perform on-device analytics with deep learning.

AI is fundamentally altering how real estate assets are valued, marketed, used, and repurposed. The traditional property valuation process relied heavily on human appraisers applying subjective judgments and limited sales comparisons. Today, machine learning algorithms can analyze thousands of property attributes and market factors simultaneously to generate more accurate, objective valuations.

AI is also playing a significant role in the drive for energy efficiency and sustainability given how much energy buildings consume. Almost a fifth of total global energy consumption is used for heating, cooling, and lighting buildings. Industrial companies like Emerson Electric (EMR) and Schneider Electric (SU) are focused on energy management for buildings.

Impacts of Real Estate Usage Evolving

Perhaps the most far-reaching impacts of AI on real estate will come from the changing ways we use physical space as AI-driven systems become ubiquitous. One major example is the advent of autonomous vehicles (AVs) and delivery drones. These are poised to reshape urban infrastructure and land use.

If self-driving cars and trucks become mainstream in the coming decades, cities may need far fewer parking garages and surface lots. AVs, especially when used in fleets or ride-sharing services, can relocate or continue circulating instead of parking.

Over time, drone pickup and drop-offs will become more common. An example is private company Zipline’s agreement with Walmart (WMT) for drone deliveries near Dallas.

Conclusion and Outlook

From design studios to construction sites to the daily management of buildings, AI is driving a fundamental evolution of the real estate industry on a global scale. The themes outlined — smarter design, new materials, robotic construction, intelligent operations, energy optimization, and evolving space usage — are all interconnected pieces of a decades-long transformation. Crucially, these are long-term, secular trends rather than passing fads.

To learn more about AI, please join our upcoming webcast on May 2 at 11 a.m. ET: “Investing in AI: Separating Hype from Reality in the AI Revolution.”

ROBO is the underlying index for the ROBO Global Robotics & Automation ETF (ROBO). THNQ is the underlying index for the ROBO Global Artificial Intelligence ETF (THNQ).

This article was originally published May 1st, 2025 on ETF Trends.