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 for 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 stories, moving poetry and catchy song lyrics.

Based on this success, OpenAI has created a more powerful version of the ChatGPT system called GPT-4, which was released in mid-March. According to AI experts, this latest iteration of ChatGPT can accept visual inputs, is much more precise and can display a higher level of expertise in various subjects. GPT-4 can describe images in vivid detail and ace standardized tests.

However, AI researcher and professor Dr. Oren Etzioni has said that OpenAI’s chatbot is still terrible at discussing the future and generating new ideas. And it hasn’t lost its tendency to deliver incorrect information with too high a degree of confidence.

What is Elon Musk’s relationship to OpenAI?

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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 failing 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?

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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 set to pour even more money into OpenAI in 2023. The company announced in mid-January that as part of the third phase of its partnership with OpenAI, it will make ‘a multiyear, multibillion dollar investment.’

Although Microsoft hasn’t said how much its latest spend will be, reports indicate that US$10 billion is on the table. 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. Indeed, Pitchbook has described the deal as an “unprecedented milestone” for generative AI technology.

What is Google’s Bard AI?

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While ChatGPT has been generating major buzz, it’s definitely not the only chatbot out there.

Notably, Alphabet (NASDAQ:GOOGL) subsidiary Google is set to launch its answer to ChatGPT in the first half of 2023. Known as Bard AI, the chatbot has been under development for the past two years and entered the testing phase in early February. Ultimately, the company will incorporate the AI technology into its Google Search tool.

Bard is built on Google’s Language Model for Dialogue Applications (or LaMDA). Google CEO Sundar Pichai has described Bard as an “experimental conversational AI service” that “seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models.”

As with ChatGPT, users can key in a query, request or prompt and Bard will provide a human-like response. One way in which Bard may have a leg up on ChatGPT is that the latter uses data up to 2021, while the former can access up-to-date information online.

However, Bard’s ability to access current data hasn’t spared it from ChatGPT’s biggest folly: confidently stating misinformation as fact. The Verge reported that when asked about new discoveries from the James Webb Space Telescope, Google’s Bard “made a factual error in its very first demo.” It didn’t take long for astronomers and science writers to point out the mistake.

But, then again, to err is human. And Google says its committed to helping Bard learn from its mistakes.

What’s the future of OpenAI and ChatGPT?

Currently, the ChatGPT platform is free to use, and can be accessed via the web. As of mid-May, those with an iPhone or iPad can also use ChatGPT through an app; an Android version is expected in the future. OpenAI’s growth plans include a pay-to-use version called ChatGPT Plus for business use, expected for release in 2023. While ChatGPT Plus will give users access to the newest iteration, ChatGPT-4, those accessing the free version will need to wait.

Microsoft is the main user of ChatGPT technology for now, but other companies are working with OpenAI to incorporate the technology into their platforms — Khan Academy, Duolingo (NASDAQ:DUOL), Stripe, Canva, and Intercom, most notably.

Generative AI technology is also replacing humans in the workplace, and will likely to continue doing so in a number of fields, from content creation and customer service to transcription and translation services, and even in graphic design and paralegal fields.

What about the long-term goals for OpenAi and ChatGPT? Metz of the New York Times believes the end game is “artificial general intelligence, or A.G.I. — a machine that can do anything the human brain can do.”

Which stocks will benefit the most from AI chatbot technology?

Other than companies directly tied to generative AI technology, which stocks are likely to get a boost from advances in the sector?

There are several verticals in the tech industry with indirect exposure to AI chatbot technology, such as semiconductors, network equipment providers, cloud providers, central processing unit manufacturers and internet of things.

Some of the publicly traded companies in these verticals include:

When will OpenAI go public?

So, can you invest in OpenAI itself? The company is not currently a publicly traded stock; however, if Microsoft does take a large position in the company, investors will be able to gain indirect exposure to OpenAI by purchasing Microsoft shares.

For those seeking direct exposure, be on the lookout for news of an initial public offering (IPO). As of mid-May 2023, there are no plans for an OpenAI IPO on the horizon, but the Wall Street Journal reported on January 5 that the AI lab is in talks with venture capital firms to sell at least US$300 million worth of existing shares in the company.