ChatGPT wades through oceans of data to conjure up original content – an image, a poem, a thousand-word essay – in seconds and upon a simple request.
Silicon Valley’s recently launched app sensation, ChatGPT, has set investors on a mission to discover the next revolutionary technology in generative AI. Some consider generative AI to be the dawn of a new era in big tech.
Artificial Intelligence (AI) has been a part of daily life for several decades. However, the public and investors took notice when start-up OpenAI launched its conversational robot in November. This event marked a turning point in the perception of AI.
Shernaz Daver, of Khosla Ventures in California, believes that AI could be the next platform to follow in the footsteps of the internet and mobile and cause an explosion of new companies.
ChatGPT is a type of generative AI that utilizes vast amounts of data to generate fresh content such as a poem, image, or a lengthy essay within seconds of receiving a simple request.
Since its limited launch in late November, ChatGPT has become one of the most rapidly expanding applications, causing both Microsoft and Google to hurriedly release projects that had been kept secret due to concerns that the technology was not yet suitable for public use.
“Within just five days of its launch, one million people utilized ChatGPT – almost 60 times faster than Facebook reached one million users,” according to Wayne Hu, a partner at SignalFire, another venture capital firm.”
“ChatGPT has sparked conversations among investors about the potential loss of millions of knowledge worker jobs, disruption of trillion-dollar industries, and a significant shift in the way we acquire knowledge, make decisions and consume,” he stated.
The rapid rise of generative AI is occurring at a time when the tech industry is grappling with a gloomy outlook, with numerous layoffs affecting both large and small companies that are struggling to stay afloat.
“Unlike other industries that are experiencing declining valuations and difficulties in raising capital, generative AI firms are not,” Daver remarked.
According to Hu, the market valuations of generative AI firms have been exceptionally high, while they have declined for other companies.
‘Hard to keep up’
Despite burning through cash at a rapid pace, Microsoft has valued OpenAI, the creator of ChatGPT, at nearly $30 billion (approximately Rs. 2.4 lakh crore).
According to entrepreneurs who specialize in generative AI, they no longer have to desperately seek attention to secure funding, nor do they have to meticulously explain the intricacies of their offerings.
“It has been of great assistance to us,” remarked Seek AI’s founder, Sarah Nagy, whose start-up enables non-experts to retrieve technical data from a database by employing ordinary language queries.
She mentioned, “I had to clarify the meaning and significance of generative AI before ChatGPT…”
The demand for features similar to those of ChatGPT appears to be insatiable, and it’s not just investors who are interested.
Nagy stated that the demand from clients has risen significantly and it has become difficult to meet the demands as they are still a small company.
Despite the trend of downsizing, the entrepreneur is determined to expand her team and is actively hiring in generative AI, as per Daver’s statement.
Lately, the major players in the industry have dominated headlines, with Microsoft leading the way as OpenAI’s partner and investor. Google is following closely, making efforts to keep pace.
However, a constellation of start-ups also has a plethora of ideas to offer in their shade.
There have been other funding rounds recently, such as Kognitos, a California-based company that aims to automate administrative tasks, and Poly, a designer platform that can produce 3D graphics or maps in just a few seconds.
Apart from the regular venture capitalists, technology giants such as Google are also scouting for investment opportunities. Recently, Google acquired a 10% stake in the new player Anthropic and its chatbot, Claude, with an investment of $300 million.
According to Hu, the potential of the ChatGPT “gold rush” is unprecedented and could extend far beyond Generative AI. The technology significantly reduces the need for a computer coder or designer to execute ideas, making it a game-changer.
Gone are the days when a Stanford PhD in computer science was a necessity to create something extraordinary using ChatGPT and other foundation models. Now, any developer can build something remarkable in a single weekend.
According to Hu, this surge of AI has the potential to surpass the impact of mobile technology and cloud computing, and instead could rival the scale of transformative events like the Industrial Revolution, which had a profound impact on human history.