In a matter of months, ChatGPT, an AI chatbot developed by OpenAI, has made a significant impact. This technology, capable of tasks such as writing poetry and code or simplifying complex subjects, has impressed everyone from CEOs to everyday users. It has even passed high-level exams for law school, medical licensing, and MBA programs.
ChatGPT, short for Chat Generative Pre-Trained Transformer, uses a simple chat interface to answer questions directly. It’s as user-friendly as Google Search. Within two months of its launch on Nov. 30, 2022, the free AI chat interface attracted 100 million users, indicating its potential to disrupt industries from internet search to content creation.
Although ChatGPT and OpenAI are not publicly traded, there are several ways to gain exposure to ChatGPT. The most direct route is through Microsoft (MSFT). Since 2019, Microsoft has maintained a strategic partnership with OpenAI and has invested billions into the AI start-up. After the unveiling of ChatGPT in early 2023, Microsoft invested $10 billion into OpenAI, demonstrating its confidence in OpenAI’s potential and its belief that artificial intelligence is the next major computing platform.
Another way to gain exposure to ChatGPT is through Nvidia (NVDA), a leading producer of graphics processing units (GPUs). Nvidia’s GPUs, often used for artificial intelligence purposes, are a key component in many machine learning models.
Microsoft, a diversified global tech giant, has recently gained attention for its strategic partnership with OpenAI. Microsoft CEO Satya Nadella has called AI the next major computing platform and has already incorporated the power of ChatGPT and OpenAI’s tools into several products, including Azure. Microsoft’s biggest bet with ChatGPT is on Bing. Nadella views the landscape in search as asymmetric, with any gain being a win for Bing.
Nvidia’s stock has soared over the last decade as its graphics processing chips have become integral to everything from gaming to self-driving cars to artificial intelligence. Nvidia’s chips are able to handle the extraordinary computing demands of AI better than its competitors. Nvidia has also partnered with Microsoft to build a massive cloud AI computer using tens of thousands of Nvidia GPUs and other Nvidia AI software tools.
Perion Network (PERI), a small-cap ad tech firm, offers another way to gain exposure to ChatGPT. Perion is known for its intelligent hub, which connects advertisers and publishers to optimize ad placement and inventory. However, almost half of its revenue comes from search, largely through its partnership with Bing.
So, should you invest in ChatGPT? While it’s still early for ChatGPT and the next iteration of AI, the potential of generative AI to change everything from work to learning and entertainment is clear. For risk-seeking investors, investing in these ChatGPT stocks may be a good idea. Microsoft seems like the most stable bet, while Nvidia should also be a winner due to increased demand for computing power. Perion Network stock also has significant upside potential if the new Bing gains traction.
Despite the tech stock crash in 2022, ChatGPT has highlighted the potential of AI and is likely to ignite a new race in artificial intelligence. To hedge your bets, investing in all three of these stocks and holding them for the long term may be one of the best ways to get exposure to ChatGPT.
Alternatively, investing in an AI ETF for broad exposure to the sector could be a wise move. As with any new technology, there is risk for investors, but the upside potential of the new generative AI technology could be enormous.
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