ChatGPT is the latest product of jaw-dropping artificial intelligence from Silicon Valley (and venture capital investments), but it’s also another AI breakthrough that hasn’t proven its worth. at the height of a significant valuation.
Projects like ChatGPT can be amazing, as they seek to test the limits of technology and push them further. However, infatuation with technological promise does not always lead to big financial returns.
Take the example of Watson. IBM Corp.
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The natural-language computer became a household name more than a decade ago by beating two humans on the game show “Jeopardy,” leading Big Blue to make a big bet on the technology. IBM opened a business unit with IBM Watson offices on the East and West Coastsand focused on healthcare as the biggest business opportunity.
This opportunity did not lead to wealth for IBM. The healthcare push has been disappointing, and when the company streamlined some of its operations earlier this year, he sold the assets of Watson Health to a private equity firm for an undisclosed amount. The rest of Watson still exists within IBM’s $25 billion software business as a suite of AI tools and applications, but IBM has never disclosed how much. income generated by these products; IBM’s data/AI segment revenue fell 1% year-over-year in the third quarter. IBM stock has fallen 8.6% since Watson won ‘Jeopardy’ in February 2011, while the S&P 500 index
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increased by 189.5% during this period, according to data from FactSet.
This lesson did not stop the fascination with AI developments. Forrester Research analyst Rowan Curran told MarketWatch that ChatGPT is an “iPhone moment for AI,” referring to Apple Inc.
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reinventing consumer electronics in 2007. Paul Saffo, a Silicon Valley forecaster and consulting associate professor at Stanford University, said, “It’s a big deal,” adding that this is where technology heads.
Although OpenAI is private and therefore does not disclose revenues, it has seen a rapid increase in valuation and investment. The San Francisco company was founded in 2015 as a non-profit organization and its initial press release at the time mentioned “donations” totaling $1 billion from Silicon Valley investors such as Peter Thiel and Reid Hoffman, as well as Amazon.com Inc.
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Amazon Web Services, to name a few, without disclosing any value. Elon Musk was also co-chairman, with Sam Altman, who remains chief executive today (Musk resigned in 2018, citing possible conflicts of interest with Tesla Inc.
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A lot has changed since – OpenAI secured $1 billion in funding from Microsoft Corp alone. in 2019
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And Microsoft is reportedly looking to pump more money into the “profit-capped” company, which was recently valued at around $20 billion in a stock sale. According to a Reuters reportIn a recent investor presentation, Open AI executives said they expect revenue to reach around $200 million next year and $1 billion by 2024.
OpenAI currently offers GPT-3 – the big-language model that ChatGPT is based on – as a paid application programming interface (API) service, so companies can build apps around it. Reuters reported that OpenAI charges around a penny or a little more for a text query and two cents for an image result.
IDC analyst Ritu Jyoti said some of ChatGPT’s clients include DoNotPay, a start-up whose chatbot negotiator – powered by GPT-3 – helps consumers cancel subscriptions, appeal traffic tickets parking spaces and in general to fight big business. Another client is Jasper, which uses GPT-3 to power its AI-based content writing and writing software.
For more: What is ChatGPT? Well, you can ask yourself.
OpenAI officials didn’t respond to a request for an interview, so MarketWatch turned to the free version of ChatGPT available on the web. When MarketWatch asked ChatGPT “who some of GPT-3’s customers are,” he replied, “It’s not uncommon for companies and organizations to use GPT-3 as a tool to build natural language processing applications. “. He then listed some customers, including eBay Inc.
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which it claims uses GPT-3 to improve the accuracy of product categorization and search; Goldman Sachs Group Inc.
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who uses it to analyze large volumes of unstructured data; and The Guardian, which uses it to generate news articles.
These answers might not be the most accurate, however, which matches the current state of ChatGPT despite the excitement. For example, while eBay said at an AI hardware summit last year that it was using machine learning and other AI techniques. to infer information from text, and Goldman Sachs is part of a GPT-3 demo, the Guardian only used GPT-3 to write a few nonsensical paragraphs from an article on AI earlier this year, not exactly something that leads to sustainable income.
“It’s unimaginable what can be done,” Jyoti said, adding that she was “excited and impressed” with OpenAI’s ChatGPT demo. “But because I live and breathe this space…I would like to be careful that it contains many inaccuracies, does not tell you the source of the data, and can be very misleading.”
OpenAI CEO Altman noted the limitations of the chatbot:
“ChatGPT sometimes writes plausible but incorrect or nonsensical answers,” OpenAI also says in a blog post about the release.
Saffo said he wasn’t too concerned about the chatbot’s error-proneness. “It’s definitely more accurate than your average conspiracy theorist,” he half-joked. “This is a technical demonstration, and it is the first of what must be followed.”
A confirmed customer who spoke with MarketWatch is Smartling, a cloud-based smart translation services company. Smartling uses GPT-3 to enhance the source text of a translation in the post-editing process, before the text is sent to translation.
“In my opinion, this kind of reinvents machine translation,” said Olga Beregovaya, vice president of AI and machine translation at Smartling.
“Even if you generate consistent nonsense, that doesn’t mean the content is useless,” Forrester’s Curran said. ChatGPT is a very good model. He’s usually good at telling you why he can’t do certain things… If you’re using ChatGPT for certain internal customer service reps, the questions asked of that rep will be much narrower, training data will.. be known.
More from Therese: Unprofitable public companies bet more than $200 million in California and lost a large amount
However, very narrow use cases will also reduce revenue opportunities, and there is not much to do for AI yet. IDC said global spending on AI, including software, hardware and services for AI-centric systems, will reach nearly $118 billion in 2022 and exceed $300 billion in 2026, but the company Market research does not crack a market for AI software on its own. And considering that high-end hardware for AI is much more expensive, it’s likely that software is only a small percentage of that total.
It is therefore difficult to have an idea of the current size of these AI software companies and what the future holds. As many analysts have noted, it’s definitely still early days. But even if that’s the case, Saffo noted that “that’s where we’re going.” He also said that all the tech demo and excitement around ChatGPT shows how humans still want to believe that inanimate objects have intelligence.
“The relentless pace of Moore’s Law means these things will progress at doubling periods of 18 to 20 months,” he said. “People will look back on ChatGPT and say ‘it was so basic and boring. “”
The same could be said of Watson a decade after making a splash. And you could also say that its ability to make money was even more disappointing than its durability as a technology. Will we say the same about ChatGPT in the next decade?
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