All the rage since it officially launched in November 2022, ChatGPT is a generative artificial intelligence (AI) software program that uses natural language processing to create humanlike dialogue.
In the chatbox, users provide details that allow the model to respond to questions and write content that includes everything from articles and social media posts to emails.
The platform was created and launched by OpenAI, an AI research company founded in December 2015. Broadly speaking, the company has a goal of developing and directing AI that benefits humanity, and ChatGPT has certainly been integral to the company’s goals.
Because the platform has grown exponentially since its launch, the question – which has been on every investor’s mind – is, how can someone invest in ChatGPT?
Before we answer that question, we’ll first provide an overview of what ChatGPT does, the platform’s growth, and, of course, how investors can invest in ChatGPT.
What is ChatGPT?
The technology behind ChatGPT isn’t necessarily new and is quite similar to automated chat services on almost any website you can think of that offers customer service. Think of the virtual chat assistants you use for help with online accounts or orders placed from an online shopping store.
The “GPT” portion means generative pre-trained transformer, which is essentially a language model and a framework for generative AI that forms responses and processes requests.
In other words, ChatGPT can also be thought of as similar to Google, although it generates far more in-depth and elaborative responses.
What makes it stand out from other AI chatbots is that it provides a humanlike feedback response and can answer follow-up questions as well as provide additional detail and feedback.
With that in mind, ChatGPT can be used for almost anything you can think of, including:
- Creating social media content: this includes platforms such as Facebook, Instagram, X (formerly Twitter), and LinkedIn. By providing ChatGPT with a topic, target audience, and the tone of the message, ChatGPT can generate content applicable to each platform
- Summarizing and paraphrasing content: including research papers, articles, emails and more. While not ideal for writing all content, ChatGPT can help users with difficult content and break it down to explain in layman’s terms in a way that is understandable and kept within the same tone
- SEO optimization: this is particularly useful for companies that want to rank their websites higher in Google’s rankings. ChatGPT can offer suggestions on titles and meta descriptions that will improve search rankings.
Of course, ChatGPT has a wide range of other use cases, but it’s safe to say its possibilities are endless.
The growth of ChatGPT
After the platform’s hard launch in November 2022, Chat GPT gained more than 1 million users in its first five days alone.
Image credit: Exploding Topics
According to Reuters, the platform reached 100 million monthly active users in January 2023, just two months after its official launch. The outfit credited a study from UBS that stated this made ChatGPT the fastest-growing consumer application of all time.
Fast forward to March 2024 and it is estimated that ChatGPT now has roughly 180 million users, while 100 million of them remain active.
In a report by Demand Sage, it is projected that ChatGPT will generate roughly $1 billion in revenue in 2024, up from its projected $200 million in 2023.
Image credit: Riori Data
In terms of the overarching chatbot market, it is anticipated it will reach a valuation of he a valuation of $7.01 billion in 2024, growing at a compound annual growth rate of 24.32 per per cent to $20.81 billion by 2029.
How to invest in ChatGPT
As it currently stands, no way exists to invest in ChatGPT shares because its creator, OpenAI, is not a publicly traded company.
With that in mind, however, people do have ways to invest in ChatGPT indirectly – notably, through two key companies.
Microsoft (NASDAQ:MSFT)
Microsoft and OpenAI have a strategic partnership in place and moved to extend their partnership in January 2023.
Microsoft is one of the world’s largest vendors of computer software; hardware for computer, mobile and gaming systems; and cloud services
In an announcement from 2023, Microsoft stated it had entered the third phase of its long-term partnership with OpenAI to “accelerate AI breakthroughs to ensure these benefits are broadly shared with the world.”
“We formed our partnership with OpenAI around a shared ambition to responsibly advance cutting-edge AI research and democratize AI as a new technology platform,” Satya Nadella, CEO of Microsoft, said in a news release. “In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications.”
Perion Network(NASDAQ:PERI)
Perion Network is an Israeli-American-led company that provides digital advertising products and services. The company particularly operates across the three digital advertising segments, including ad search, social media and display/video/CTV.
Investors can get exposure to ChatGPT through Perion Network thanks to Perion’s strategic partnership with Microsoft’s Bing search engine, which has been rolled out with a new version powered by ChatGPT.
While Microsoft and Perion Network might be an investor’s only gateway into ChatGPT itself, investors can invest in other companies with chatbot technologies.
IBM (NYSE:IBM)
Also known as International Business Machines, IBM is a provider of hybrid cloud and AI. Its segments include software; consulting; and infrastructure and financing.
Under its software segment are its hybrid platform and solutions to help clients operate, manage and optimize IT resources within hybrid, multi-cloud environments. Through its consulting segment, IBM provides business transformation, technology consulting and application operations.
Meanwhile, its infrastructure segment focuses on hybrid infrastructure and infrastructure support, while its financing segment focuses on client financing and commercial financing.
Notably, IBM’s chatbot service is watsonx, which is an AI platform for building and tuning foundation models, generative AI and machine learning systems. The platform includes a studio, data store and governance toolkit.
Alphabet (NASDAQ:GOOGL)
Alphabet Inc. is a holding company with a wide range of segments, including Google Services, Google Cloud and Other Bets.
Under Google Services are products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search and YouTube.
The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers.
The Other Bets segment focuses on the sale of healthcare-related services and Internet services, while Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace.
Notably, the Google Cloud Platform provides cybersecurity, databases, analytics, and a range of AI offerings.
Alphabet launched Bard in February 2023, which is a multi-language AI model powered by Google’s language model LaMDA. According to a post from Alphabet:
Bard seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models. It draws on information from the web to provide fresh, high-quality responses. Bard can be an outlet for creativity, and a launchpad for curiosity, helping you to explain new discoveries from NASA’s James Webb Space Telescope to a 9-year-old, or learn more about the best strikers in football right now, and then get drills to build your skills.
If investors are looking for an alternative to ChatGPT – and because ChatGPT can’t be directly invested into – Bard, and Alphabet, might be the closest thing to it.
Exchange-traded funds
Another way to get exposure to ChatGPT is through exchange-traded funds (ETFs), which are funds traded on a stock exchange the same way shares of a company are.
In particular, investors can invest in the Roundhill Generative AI & Technology ETF(NYSEARCA:CHAT), which is the world’s first Generative AI ETF.
CHAT began trading in May 2023 and tracks a portfolio of companies actively involved in Generative AI. As it currently stands it has 49 holdings in its portfolio, with some of its top holdings including:
- NVIDIA (NASDAQ:NVDA)
- Microsoft
- Alphabet
- Meta Platforms (NASDAQ:META)
- Adobe (NASDAQ:ADBE)
The bottom line
It goes without saying that ChatGPT and generative AI are transforming technology and the way we live.
Because the technology and its use cases are still relatively new, there will be hiccups along the way, and tons of new entrants will enter the market looking to capitalize on the technology’s popularity.
As such, it remains crucial for investors to do their own due diligence when it comes to investing in companies developing chatbot technology.
While companies such as Microsoft, IBM and Alphabet are all large-cap companies, they’ve been around long enough to weather the storm that is the ever-so-fickle stock market.
No matter which way you look at it, investing comes with its risks – and rewards, of course – it’s just a matter of whether it’s right for you.
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