What is OpenAI’s ChatGPT and Can You Invest?

OpenAI’s ChatGPT is the latest technological breakthrough in the artificial intelligence (AI) space.

The global AI market is already expected to grow at a compound annual growth rate of 38.1 percent to reach US$1.59 trillion by 2030 — just how much of an impact OpenAI’s ChatGPT will have on this space is hard to predict.

The emerging technology is representative of a niche subsector in the AI ​​industry known as generative AI — systems that can generate text, images or sounds in response to prompts given by users.


“(T)he growing buzz surrounding (generative AI) has reached a fervor the likes of which the (venture capital) market hasn’t seen in years,” according to venture capital market research published by Pitchbook. “The release of tools like DALL-E 2, Stable Diffusion and ChatGPT has captured a wide array of investors by demonstrating that generative AI is now ready to be applied to various commercial applications from advertising and law to writing software code.”

There’s definitely a lot of excitement surrounding generative AI technology, but can you invest in OpenAI’s ChatGPT? Here the Investing News Network (INN) answers that question and more.

What is OpenAI’s ChatGPT?

Created by San Francisco-based tech lab OpenAI, ChatGPT is a generative AI software application that uses a machine learning technique called reinforcement learning from human feedback (RLHF) to emulate human-written conversations based on a large range of user prompts. This kind of software is better known as an AI chatbot.

ChatGPT learns language by training on texts gleaned from across the internet, including online encyclopedias, books, academic journals and blogs. Based on this training, the AI ​​chatbot generates text by making predictions about which words (or tokens) can be strung together to produce the most suitable response.

More than a million people engaged with ChatGPT within the first week of its launch free public testing on November 30, 2022. Many were in awe of the chatbot’s seemingly natural language capabilities, not only in terms of understanding questions, but also because of its human-like responses. In essence, users felt as if they were having a conversation with a real human being.

Besides being an excellent conversation partner, ChatGPT can write engaging short storiesmoving poetry and catchy song lyrics.

Based on this success, OpenAI has been working on a more powerful version of the ChatGPT system called GPT-4which is set to be released in 2023, possibly in the first quarter of the year.

What is Elon Musk’s relationship to OpenAI?

OpenAI was founded in 2015 by current CEO Sam Altman, as well as Tesla’s (NASDAQ:TSLA) Elon Musk and other big-name investors, such as venture capitalist Peter Thiel and LinkedIn co-founder Reid Hoffman. Musk left his position on OpenAI’s board of directors in 2018 to focus on Tesla and its pursuit of autonomous vehicle technology.

A few days after ChatGPT became available for public testing, Musk took to Twitter to say, “ChatGPT is scary good. We are not far from dangerously strong AI.” That same day, he announced that Twitter had shut the door on OpenAI’s access to its database so it could no longer use it for RLHF training. His reason: “OpenAI was started as open-source & non-profit. Neither are still true.”

Is ChatGPT revolutionary or hype?

Is ChatGPT a revolutionary technology or just another hyped-up tech fad that will flop, much in the way of Google Glass or the Segway? It may be too early to tell, but as with any new technology, there are plenty of wrinkles to iron out.

One of the most challenging bugs to fix before ChatGPT can be deployed more widely with a high degree of confidence is the chatbot’s propensity to respond with “plausible-sounding but incorrect or nonsensical answers,” admits OpenAI. Remember, its selection of which words to string together in a response are actually predictions — not as fallible as mere guesses, but still fallible.

From basic math to medical information, ChatGPT doesn’t always provide the right answers — a failure that can have dangerous real-life consequences. The tech could be used to spread misinformation, carry out phishing email scams or write malicious code.

What’s more, the AI-based technology is prone to racial and gender-based biases. Not only has this language learning model contributed to the human-like quality of its responses, but it has also picked up on some of humanity’s shortcomings.

“ChatGPT was trained on the collective writing of humans across the world, past and present. This means that the same biases that exist in the data, can also appear in the model,” explains Garling Wu, staff writer for online technology publication MUO. “In fact, users have shown how ChatGPT can give produce some terrible answers, some, for example, that discriminate against women. But that’s just the tip of the iceberg; it can produce answers that are extremely harmful to a range of minority groups.”

There’s also the fear among teachers that the technology is leading to an unwelcome rise in academic dishonesty, with students using ChatGPT to write essays or complete their science homework.

“Teachers and school administrators have been scrambling to catch students using the tool to cheat, and they are fretting about the havoc ChatGPT could wreak on their lesson plans,” writes New York Times technology columnist Kevin Roose.

Despite these concerns, we’re likely to see new iterations of ChatGPT — hopefully without the aforementioned bugs — as OpenAI has the backing of tech giant Microsoft (NASDAQ:MSFT).

Why is Microsoft investing in OpenAI?

Since 2019, Microsoft has invested at least US$3 billion in OpenAI to help the small tech firm create its ultra-powerful AI chatbot, as reported by New York Times technology correspondents Cade Metz and Karen Weise.

“Microsoft is now poised to challenge Big Tech competitors like Google (NASDAQ:GOOGL), Amazon (NASDAQ:AMZN) and Apple (NASDAQ:AAPL) with a technological advantage the company has not possessed for more than two decades,” Metz and Weise explained in a recent article. “Microsoft is in talks to invest another $10 billion in OpenAI as it seeks to push its technology even further, according to a person familiar with the matter.”

According to Forbes, OpenAI was recently valued at US$29 billion, meaning Microsoft’s US$10 billion move would be huge.

How could Microsoft benefit from its investment? It seems the tech giant is hopeful advancements in generative AI may have the potential to increase revenues for its Azure cloud computing business as OpenAI officially licensed its technologies to Microsoft in 2020. According to Pitchbook, if the deal goes through it would be an “unprecedented milestone” for generative AI technology.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

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