Will ChatGPT repeat the dot-com and crypto crash?
RAIN CEO Nithya Thadani joined ‘The Big Money Show’ to discuss the rise of the new AI technology ChatGPT and the multiple ways it can be used to benefit consumers.
The hype surrounding ChatGPT has led some industry observers to warn that artificial intelligence (AI) will bubble and crash like the 2000 dot-com meltdown or crypto collapse.
Will the hunger for “the next big thing” drive investment in ChatGPT and other AI apps to unsustainable heights and rapid collapse?
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OpenAI and ChatGPT logos are seen in this illustration taken on February 3, 2023. (Reuters/Dado Ruvic/Illustration/Reuters Images)
Two experts say no.
Venture capitalist Jai Das told FOX Business that there is probably a mini-bubble around AI language applications, but no bubble around AI.
Das is one of the founders of Sapphire Ventures, a VC firm specializing in growth and expansion companies. He believes the public markets are more rational when it comes to artificial intelligence than they were when it came to cryptocurrency or electric vehicle startups.
Bill Haskell agrees. The CEO of Innventure was the CEO of Internet Capital Group, a $60 billion dot-com VC firm at its peak. At the time, Haskell told FOX Business that “money was free.”
“The market was in this frenzy. Everyone was just jumping into everything they could. IPOs [initial public offerings] was a dime a dozen back in those days.”
Haskell’s Innventure aims to build billion-dollar businesses by acquiring and commercializing neglected technologies from multinational corporations. He says institutional investors are wary of investing in artificial intelligence.
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Hyperscale hegemony
Chicago, IL – September 7, 2019: View of the new Google building in the West Loop, Fulton Market area of downtown Chicago.
The involvement of hyperscalers including Microsoft, Google and China’s Baidu will influence investment decisions. Microsoft recently announced a new investment in ChatGPT maker OpenAI while Google rolled out its Bard AI service and Baidu unveiled a ChatGPT-style “Ernie Bot”.
“These guys have been working on this for a long, long time,” Haskell told FOX Business. “It won’t be very long before there are 10 ChatGPTs out there all competing for the same users and the same space, and who knows which one will rise to the top.”
In addition, many AI applications will be built around—or integrated with—existing applications owned by hyperscalers, reducing the demand for new productivity applications. Das mentions Google Docs as an example. Integrating AI into Google Docs eliminates the need for a new AI-only docs app.
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Haskell believes the AI market will develop in fits and starts until something clicks.
“What will make it go will be some kind of junk, consumer, social media thing,” he speculates.
Experts cite the internet as an example. The Internet was primarily an email tool until browsers literally opened up the World Wide Web. “When the browser came in, everyone’s eyes opened,” says Das.
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ChatGPT IPO?
A logo for ChatGPT seen on a mobile phone. (CFOTO/Future Publishing via Getty Images/Getty Images)
Das sees a strong pipeline of investment opportunities, primarily in middleware, the software that will train AI to be better. He expects to see “hockey stick” growth in Series A and B funding in a year or so, adding that it could take another 6 to 8 years for any of these companies to go public.
Haskell, who has led several IPOs, says he wouldn’t be surprised if an AI software platform goes public this year. He notes that Chat GPT was recently valued at $29 billion on $80 million in revenue.
“I wouldn’t be surprised if you have someone jumping out, including ChatGPT. If they can get that kind of valuation [$29 billion] in the public marketplace, you can see that because they’re going to have to keep raising capital to develop the technology, and that’s one way to do that.”
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Where is ChatGPT headed?
Michael Burton-Straub, left, and Declan Lewis attempt to “Find the Pen” in Donnie Piercey’s class at Stonewall Elementary in Lexington, Ky., Monday, Feb. 6, 2023. (AP Photo/Timothy D. Easley/AP Images)
Both Haskell and Das believe ChatGPT’s long-term future lies in its integration into other apps. However, ChatGPT will not replace humans.
“ChatGPT will live on, but will be embedded in many applications,” Das told FOX Business. “It’s very difficult for AI to replace humans. It’s like a digital photograph.”
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Haskell uses the example of a self-driving car.
“There can certainly be an audible component to it. When you drive in an autonomous vehicle – it gives you context about where you want to go, and what you want to see – it will start making decisions on your behalf based on fairly limited input from you .
“It’s not going to be some fleeting fad. There are real meaningful applications for it. Which ones will come out and dominate first, it’s hard to predict.”
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Just two months after its launch, ChatGPT – which can generate articles, essays, jokes and even poetry in response to questions – has been rated the fastest-growing consumer app in history. That has pushed Google owner Alphabet Inc to plan its own chatbot service and use more artificial intelligence for its search engine.
Reuters contributed to this article.
Beyond the Screen co-founder Frances Haugen discusses the rise of ChatGPT and the ethical pitfalls of advanced artificial intelligence on “The Claman Countdown.”
