OpenAI, the Generative Artificial Intelligence rising star and ChatGPT

OpenAI

Introduction to OpenAI

The Origin of OpenAI

Elon Musk and several artificial intelligence developers working at Google discussed their common concerns at a dinner-artificial intelligence will eventually take over the world, but related technologies will only be mastered by individual giants. Therefore, they plan to establish an artificial intelligence research institution that does not aim at profit, to maximize the potential of artificial intelligence, to achieve full open source, and to share artificial intelligence technology with everyone who wants to use it.

The Founding of OpenAI

With Musk’s support, Altman, president of the American startup incubator Y Combinator, and a group of Silicon Valley investors responded one after another. In order to ensure the leading and smooth technology research, they set their sights on leading AI technology giants in the industry and spend a lot of money to invite them to join.

In 2015, OpenAI was officially founded in California. Altman, who was the CEO at the time, emphasized: “The people we recruit are all supportive of open source, and they are willing to share their research and development results.” It should be noted that Google open sourced its TensorFlow artificial intelligence before OpenAI was created engine. To some extent, OpenAI has been in direct competition with Google since its inception.

Musk quits OpenAI

The relationship between Tesla and artificial intelligence technology is getting deeper and deeper, and Musk’s main business and the positioning of the OpenAI non-profit organization have created an obvious conflict of interest. In 2017, Andrej Karpathy, a researcher at OpenAI and a Ph.D. from Stanford University, jumped to Tesla as the director of artificial intelligence and autonomous driving vision, reporting directly to Musk.

At this time, the outside world is increasingly worried that Tesla will use OpenAI’s technology for system development and product upgrades, requiring Musk and OpenAI to draw a clear line. In 2018, Musk left OpenAI’s board to become a sponsor and advisor.

OpenAI in my book

I mentioned the company OpenAI in the recently published book “The Rules of Ten Baggers“:

  • Sections 5-8, p. 263, Discussion of Tesla

Operation of OpenAI

The value of OpenAI

Traditional search engines crawl, index, sort and match the results of keywords based on algorithms, and then users see a large number of links, and then find the information they want. ChatGPT is a generative artificial intelligence (generative AI) model based on the creation of new content. It has been trained by a huge database and uses artificial intelligence technology of natural language processing (NLP). Through one-to-one dialogue and human-like Tone, give a single immediate answer, but also combine context and multiple dialogues to help solve more complex continuity problems. The “humanized” chat-style query and response it provides can greatly improve the user experience.

With a good user experience, you can increase the user’s usage time and increase the willingness to pay. ChatGPT is interesting enough, user stickiness is also strong, and the number of users will increase from time to time, so there is more room for commercialization. Traditional search gives a unified answer, while ChatGPT is a personalized question and answer, which can carry more diverse and rich capabilities in the future. Driven by the ability of artificial intelligence, services such as live broadcast, e-commerce, and health can also realize customized services for each person’s different needs. For example, it can directly provide users with the Internet link address of the movie, ticket purchase service options, and suggestions based on the user’s preferences, coupled with artificial intelligence technology. Such a one-to-one service is more natural and easier for users. accept.

Traditional search gives a unified answer, while ChatGPT is a personalized question and answer, which can carry more diverse and rich capabilities in the future. Driven by the ability of artificial intelligence, services such as live broadcast, e-commerce, and health can also realize customized services for each person’s different needs. For example, it can directly provide users with the Internet link address of the movie, ticket purchase service options, and suggestions based on the user’s preferences, coupled with artificial intelligence technology. Such a one-to-one service is more natural and easier for users. accept.

OpenAI’s business model

ChatGPT can dialog and create content almost like humans. It is estimated that from the public test at the end of November 2022 to the end of January, the number of monthly active users has reached 100 million.

In order to survive, OpenAI has given up its non-profit and fully open-source claims.

OpenAI, which makes most of its revenue by providing artificial intelligence tools to developers, has been testing ChatGPT Plus, a version of its chatbot for business users. In the trial, OpenAI charges $20 per month for ChatGPT Plus.

The company is still losing money, with revenues of only $35 million in 2022; OpenAI expects revenues of $200 million in 2023 and $1 billion in 2024.

Challenges faced by ChatGPT

The impact of artificial intelligence on human society and the business world has been exaggerated before. Other potential killers include the massive cloud computing costs associated with ChatGPT (OpenAI uses Microsoft’s cloud computing arm, Azure, to process search requests).

Also, ChatGPT does not update in real time over an internet connection. It knows very little about what happens after the 2021 training period ends. OpenAI also warns that ChatGPT is not perfect, especially for students who plan to use it to cheat.

Even ChatGPT sometimes only produces timeless text content, cannot display the source of information, does not guarantee accuracy, and even makes elementary school arithmetic mistakes.

Intellectual property issues arise as generative AI models draw what they need to create new material from the web. Generative AI techniques can be used for nefarious purposes, such as “deepfakes” in videos or to help hackers generate code. At the very least, OpenAI acknowledges that ChatGPT sometimes generates incorrect or biased content.

OpenAI is also aware that the current situation has the possibility of getting out of control. CEO Altman called on users to use ChatGPT cautiously on his personal social account. He said: “ChatGPT has obvious limitations, but its powerful capabilities in some aspects make people mistakenly think that it is great. Now rely on it would be wrong to do anything important, this is just a preview and we still have a lot of work to do in terms of robustness and realism.”

Altman, CEO of OpenAI, said in an interview with Forbes that “even if there is indeed an artificial intelligence system that can replace the existing search service function in the future, at least ChatGPT at this stage will not change the existing search service usage ecology.” He also appealed on his personal social account, “ChatGPT has obvious limitations, but its powerful capabilities in some aspects make people mistakenly think that it is great. It is wrong to rely on it to do anything important now. It’s just a preview, we still have a lot of work to do in terms of robustness and realism.”

OpenAI’s competitors

OpenAI is part of a wave of NLP startups. OpenAI’s opponents include startups such as AI21 Labs, Anthropic, and Cohere.

Main product introduction of OpenAI

ChatGPT, Github Copilot, and DALL-E are the most famous products developed by OpenAI so far.

ChatGPT

OpenAI released ChatGPT to the public on November 30, 2022, marking the first time such a powerful artificial intelligence tool will be available to ordinary internet users. However, generative AI techniques are already proving their worth with practical applications in marketing, advertising, drug development, legal contracts, video games, customer support, and digital art. The key to the rise of generative artificial intelligence is improving natural language processing models that help computers understand the way humans write and speak.

ChatGPT is just one of many generative AI technologies that could disrupt many industries by generating textual content, images, videos and computer programming codes themselves. ChatGPT’s skills include writing codes, homework, papers, speeches, event planning, advertising copywriting, movie scripts and other texts, or giving advice on home decoration design, programming debugging, and life planning.

ChatGPT uses artificial intelligence to generate human-like responses to search queries based on data collected from the web. Ask it to solve a complex math problem and it will do it in seconds. You can translate foreign language text into English instantly. Or give it a list of what’s in your fridge, and it can generate a dozen recipes from those contents. The list is endless.

No wonder ChatGPT surpassed 1 million users within days of launch. In its first month of launch, ChatGPT garnered almost half as many unique visitors as Microsoft’s Bing search engine. As usage exploded, OpenAI’s computing resources were stretched to the limit. By mid-January, OpenAI said ChatGPT was “operating at full capacity” and was sometimes unable to connect to its cloud system.

Github Copilot

Github Copilot, introduced by Microsoft, is a tool provided by OpenAI that helps software engineers by suggesting code and functions on the fly. So far, more than 1 million people use GitHub Copilot. Microsoft claims to have the most powerful supercomputing infrastructure for cloud AI to support it.

Dall-E

DALL-E is an artificial intelligence product developed by OpenAI, which is an image generator. ChatGPT can answer questions and write articles and poems, while Dall-E can convert text into images.

Codex

OpenAI Codex is an artificial intelligence system that converts natural language into code. That is to say, Codex allows developers to write programs with simple spoken instructions. Now OpenAI releases the API of Codex in the form of private beta testing.

Major software vendors in this field

Alphabet

Alphabet also invested $200 million in OpenAI’s rival artificial intelligence manufacturer Cohere.

Alphabet announced on February 3, 2023 that it had invested $300 million in Anthropic, accounting for 10% of the equity. Anthropic will use Google Cloud services. Anthropic was founded by the former director of OpenAI in 2021. In January 2023, the chat robot “Claude” will be opened for limited testing. It is seeking to open it to more people in the next few months to compete with the fast-growing ChatGPT. Apprentice Bard can answer recent update, this is where Apprentice is stronger than ChatGPT.

In order to fight against ChatGPT, Alphabet CEO Pichai said in the fourth quarter of 2022 that Bard chatbot will be released in the next few weeks or months, and users can use these products as search tools. (Note: Bard is available now ) Bard chatbot would be powered by Language Model for Dialogue Applications, or LaMDA, Google’s artificial intelligence.

Dario Amodei, CEO of Anthropic, said: “Our partnership with Google Cloud can help Anthropic’s next phase of development, which is to bring our artificial intelligence system to more people. This partnership will allow us to obtain the cloud foundation we need today. Facility efficiency and scale.”

Microsoft

Microsoft is currently the largest investor in OpenAI, , can hold more than 1/3 of the shares of OpenAI at most. Microsoft invested $1 billion in OpenAI in 2019, and just announced a high-profile investment of $10 billion in OpenAI in January 2023. Microsoft also provided funding for OpenAI in 2021 before. Before recovering its investment, Microsoft will receive a 75% share of OpenAI’s profits, after which Microsoft will hold a 49% stake.

Microsoft signed an “exclusive supplier” agreement with OpenAI, plans to integrate AI tools like ChatGPT into all of its products, including its Bing search engine. Microsoft has integrated OpenAI’s Dall-E2 tool into its graphic design software. Dall-E2 converts written words into pictures. OpenAI’s generative AI could also improve office productivity tools like the email platform Outlook, PowerPoint and Word. At present, Microsoft has plans to integrate OpenAI technology and ChatGPT in a variety of products, including Azure cloud services, Office family, Teams collaboration conference software, Bing search engine, Design design software, Dynamics 365 business software, etc.

Meta

Meta will benefit from OpenAI’s technology through U.S. digital media company BuzzFeed. With the OpenAI API, BuzzFeed uses AI to help create personalized content, and its stock has soared. Meta recently paid BuzzFeed millions of dollars to help its social software generate content.

Amazon

Amazon’s cloud computing division, AWS, formed a small working group and found that ChatGPT did an “excellent” job of answering AWS customer support questions, job interview questions, corporate strategy questions, and writing training documents.

Baidu

Baidu (ticker: BIDU) has launched an artificial intelligence chat robot service similar to ChatGPT in March 2023. The product name is determined to be “Wen Xin Yi Yan”, and the English name is “ERNIE Bot”. Tools will allow users to obtain conversational search results.

Other companies

Jasper pays OpenAI to use its older language model, GPT3. Jasper’s marketing department customers describe in natural language what they want Jasper to write. Jasper’s artificial intelligence platform generates content for blog posts, social media posts, website copy, and more. It recently raised $125 million at a valuation of $1.5 billion.

Meanwhile, startups including Adept, Inflection AI, Character.AI, and others aim to automate software tasks and integrate generative artificial intelligence into third-party applications.

Expect HubSpot (US: HUBS ), Intuit (US: INTU ) and Paycom (US: PAYC ), among many other prominent software companies, to integrate generative artificial intelligence into their products.

The Next Step in Generative AI

Venture Capital Goes Into Generating Artificial Intelligence

Some builders of large language models, such as Cohere and AI21 Labs, sell their products in the enterprise market. Others make their models freely available to software developers.

Besides OpenAI, another well-funded startup is Stability AI, developer of the open-source content-to-image generator Stable Diffusion.

Startups targeting fashion, e-commerce, drug design, personalized video, and computer vision include Veesual AI, Runway, Ordaos Bio, Paige.AI, Synthesis AI, Character.AI, and Tavus.

According to PitchBook, venture capital investment in generative AI jumped to $1.37 billion by 2022 — nearly as much as the past five years combined.

Big Pharma targets new drug discovery

Gartner predicts that by 2025, generative AI will be used to discover 30% of new drugs and industrial materials, up from zero in 2022.

Impact of the OpenAI boom

According to a MarketWatch analysis of AlphaSense data, between 2023 and February 3 alone, there have been 99 earnings calls for companies with a market capitalization of at least $5 billion that have mentioned AI at least once, and by this point in 2022 there have been 99. 111 times. But there were 466 mentions of artificial intelligence in this year’s conference call, up from 303 a year ago.

Maybe that’s why Alphabet’s management team has a lot on the topic of artificial intelligence. In the fourth-quarter 2022 earnings call, the term artificial intelligence appeared 62 times, up from 26 times in the same period in 2022. Likewise, artificial intelligence was featured 37 times on Meta’s earnings call, up from 10 in the same period a year ago. Microsoft mentioned it 29 times.

Microsoft CEO Nadella said in a conference call that the company’s investment and commercial cooperation with OpenAI “I think that by leading artificial intelligence, it will drive the innovation and competitive differentiation of each of Microsoft’s solutions. change”. Apple CEO Cook emphasized that “artificial intelligence is our main focus and will affect every product and every service we have.”

Management teams seem to want Wall Street to understand the ways AI is already impacting their business and how it could drive future earnings, especially to take advantage of the frenzy in AI technology that OpenAI has generated since its debut of its ChatGPT chatbot in late 2022. BuzzFeed (ticker: BZFD) announced that it will integrate the function of the ChatGPT chat robot, which immediately caused the stock price to soar. The Wall Street Journal reported that the company plans to ramp up testing of the feature.

Stock price surged in many companies, including technology-driven diversified media company BuzzFeed, artificial intelligence software company C3.ai (ticker: AI ), audio and speech recognition company SoundHound AI (ticker: SOUN), as well as the smart application software BigBear.ai (ticker: BBAI), etc., are all smeared because they launched similar services or because the company is an artificial intelligence software company, and their stock prices have also risen sharply in the short term.

How much is OpenAI currently worth?

In mid-October 2023, it will sell its existing employee shares at a valuation of $86 billion. The estimated valuation is between US$8-90 billion. This valuation is among the best in the world, second only to Musk’s SpaceX and Tik Tok’s parent company ByteDance.

OpenAI
credit: Wikimedia

I am the author of the original text, the abridged version of this article was originally published in Smart monthly magazine.

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