Bet on intelligence: how to make money on ChatGPT and the like
Artificial intelligence technologies are actively used in many fields of activity: medicine, finance, content creation, IT sphere. With the appearance of the ChatGPT chatbot from the American company OpenAI, a new wave of interest in neural networks has emerged. Which companies are dominating the market for AI systems, says Evgeny Shatov, a partner at Capital Lab.
On November 30th, OpenAI launched the chatbot ChatGPT. In just two months, the audience reached 100 million people; No other app has managed to gain so many users in such a short time. The secret of popularity turned out to be very simple – the abilities of the chatbot were pleasantly surprised, and the novice user was completely shocked. The bot easily answered complex questions written in ordinary human language, could “take into account” the context of the story, solve mathematical problems, correct and explain bugs in the program code, write stories and letters based on your chosen topic or keywords ChatGPT completed test tasks for Programming candidate, passed the toughest exam for a medical license in the United States and had no problem with law exams and business courses at American universities.
However, a chatbot can sometimes talk nonsense in response to basic questions. Therefore, at the current stage of development, ChatGPT is more of a convenient assistant for solving routine tasks, which often replaces the usual web search engines. Although AI is unwilling to replace a human as each of its answers needs to be verified – the cost of making a mistake can be too high.
Promising industries
Internet search is one of the areas where AI technologies could change the balance of power in the near future. Microsoft, a major investor in OpenAI, has already built ChatGPT functionality into its products: the Bing search engine and the Edge browser. The company also announced an expanded partnership with OpenAI and a multi-million dollar investment in the company’s projects. Microsoft is clearly betting on artificial intelligence and is hoping to increase its small share (around 3%) of the web search market, which is almost entirely owned by Google.
Google quickly responded to the threat and announced the launch of a ChatGPT competitor called Bard. While the service is experimental and open to a small circle of testers. Curiously, during the demonstration, the launch of the new technology was marked by a sensational error: the chatbot incorrectly answered a fundamental astronomy question, claiming that the James Webb telescope had taken the first images of the planet outside the system Solar Dem Non è: In In the two days following the filing, Alphabet’s stock fell nearly 10%, causing the company’s market cap to decline by $100 billion.
While programmers, writers, editors, and other professionals are talking about the potential threat posed by artificial intelligence, representatives of some other creative professions are already seeing a real threat from neural networks. You can see examples of the work generated by the software on the Midjourney Neural Network website. Designers, artists, illustrators – everyone can already more or less replace this product. Midjourney can generate images based on keywords provided by the user. You can even ask the neural network to illustrate famous Russian proverbs like “Fear has big eyes” or “In calm waters there are demons”.
Using just two tools, ChatGPT and Midjourney speeds up many tasks by an order of magnitude: launching a new product or a startup, for example. The chatbot suggests a catchy name for the product, generates a website structure to promote it, and Midjourney helps with corporate identity or imagery for advertising campaigns. And there are thousands of such scenarios where AI helps a human. In almost every profession there is a task that can be assigned to artificial intelligence systems. And this already in the current development stage of this technology and with the help of free tools. In a few years, when the next generation of this technology appears, it can seriously be said that AI can replace many people in different fields.
What should an investor do?
Investors never miss an opportunity to bet on the future as the market sees AI right now. When a trend has just started, it is very important to be cautious, correctly weigh all the pros and cons, possible risks and make the right bets. Investments in this sector should be approached with caution and investments diversified as much as possible.
Among the companies participating in the AI tender, we see such big players as Microsoft, Alphabet, Amazon, which claim to be developing in this direction for a long time, and the Chinese Baidu (even the Chinese government recently announced this award financial support for the development of AI). When choosing these companies, it should be borne in mind that AI is not at the heart of their activity, and the behavior of the stock market can be influenced by results in other areas of activity. But if the AI succeeds, the company’s shares could grow double digits.
Back when tech leaders had yet to announce their entry into the AI market, investors who saw promise in that direction could buy shares in small-cap companies, albeit with developments in that direction. This has led C3.ai (AI), a provider of AI software solutions for enterprise applications, to grow 108% this year. BuzzFeed (BZFD) shares surged 120% after it was revealed the company plans to use ChatGPT to create content for its website. SoundHound AI (SOUN), which announced an AI voice application for automotive and other end markets, is up 113% year-to-date. BigBear.ai Holdings (BBAI), which makes AI-based analytics tools for US defense and intelligence agencies, is up 514% year-to-date. It’s dangerous to buy stocks of these companies after tremendous growth, if the hype dies down or the execution of their projects isn’t as successful as the market expects, they can collapse.
Prudent investors should consider other options for investing in AI that don’t involve the risk of buying speculative small-cap companies and not buying shares in companies in this segment. Consider the semiconductor companies that will thrive as demand for AI software and services increases. Among them, you can count on Nvidia (NVDA), whose analysts J.P. Morgan expect 25% annual revenue growth through 2027 thanks to mass adoption of AI services, Broadcom (AVGO) and Marvell. Technology (MRVL). They are in the best position to sell their chips to tech giants that make AI products.
Over time, AI can penetrate deeply into many areas of our lives. But to take advantage of this, investors need to make their decisions now. It’s very important not just to follow the hype, but to carefully weigh all the risks and prospects when deciding to buy stock in a particular company.
