As the use of artificial intelligence continues to expand and transform the business world, investors are looking for new opportunities to capitalize on this growing industry. One of the most promising applications of AI is the development of powerful language models like ChatGPT, which uses natural language processing algorithms to simulate human-like conversations. According to a report by Grand View Research, the global chatbot market size is expected to reach $3.99 billion by 2030. Additionally, Precedence Research projects that the global AI market will grow at a compound annual growth rate of 38.1 percent and reach a value of $1.59 trillion by 2030.
While it’s difficult to predict the exact impact that OpenAI’s ChatGPT will have on this rapidly expanding industry, its potential influence is worth considering. In this article, we will explore how to invest in ChatGPT stocks, which are companies some believe are leading the way in the AI field, and the potential risks and rewards of investing in this exciting sector.
Key Takeaways:
Some investors have been drawn to ChatGPT stocks due to their potential to revolutionize various industries by automating repetitive tasks, improving customer experiences, and enhancing decision-making processes. ChatGPT also has a strong team of founders and investors, which some believe adds to its credibility and potential for success.
The ChatGPT stock value chain includes a wide range of stakeholders and key players spanning investors, data scientists, machine learning experts, software engineers, hardware and software providers, and application developers and integrators.
ChatGPT stocks, while of interest due to their growth potential, may also present high volatility and uncertainty associated with the emerging technologies, as well as potential competition and regulatory risks
Investors can’t yet purchase direct stocks of OpenAI, but may be able to invest in companies using ChatGPT technology including UiPath, Zendesk, and LivePerson, as well as relevant exchange-traded funds (ETFs) through an investing platform like Public.
What is OpenAI’s ChatGPT?
OpenAI’s ChatGPT is a powerful language model developed by OpenAI, a research organization founded in 2015 by several tech industry heavyweights, including Elon Musk, Sam Altman, and Greg Brockman. ChatGPT simulates human-like conversations using advanced natural language processing algorithms and can understand and generate human language in a way that is nearly indistinguishable from a human. The model has garnered a lot of attention and is considered one of the most advanced language models in the world. Its potential impact on industries like healthcare, finance, and retail has the potential to be significant, and many companies are already exploring how they can use ChatGPT to improve their operations and customer interactions.
Within the first week of its free public testing launch on November 30, 2022, over a million people engaged with ChatGPT. Users were amazed by the chatbot’s natural language capabilities, not only in terms of its ability to understand questions, but also because of its human-like responses.
How to Buy/Invest in ChatGPT Stocks
Becoming acquainted with the ChatGPT value chain can be an excellent initial step for investors who want to invest in ChatGPT stocks but are uncertain which ones align with their investment objectives. By getting to know the ChatGPT value chain, investors can quickly distinguish the companies that are best positioned for growth from those that have more risk.
The ChatGPT value chain is a complex ecosystem of players and stakeholders who work together to drive the development, deployment, and adoption of the technology. These individuals include:
Data scientists, machine learning experts, and software engineers: These players work to improve the capabilities of the technology – directly shaping the R&D efforts of OpenAI
Hardware and software providers: While hardware providers supply the computing power and infrastructure needed to support the technology, cloud computing providers offer hosting and storage solutions for ChatGPT.
Application developers and integrators: Stakeholders who use ChatGPT to develop new products and services. For example, ChatGPT can be used to develop conversational chatbots, virtual assistants, and customer service tools.
Investors: These stakeholders provide capital to OpenAI and other companies involved in developing and deploying the technology. These investors may include venture capitalists, institutional investors, and individual investors who buy and sell shares of OpenAI stock on the public markets.
Having analyzed the ChatGPT value chain and its components, let’s look at the steps and various methods available for investing in ChatGPT stocks. These include both direct and indirect strategies and can be chosen based on the investor’s specific investment goals and risk tolerance.
To invest in ChatGPT stocks, investors can follow these basic steps:
Conduct research: Before investing, research ChatGPT and the companies that use the technology. Analyze the potential risks and rewards of investing in ChatGPT stocks.
Choose a broker: Consider using a reputable online broker such as Public, which provides access to the stock market where ChatGPT stocks are listed. When choosing a broker, take into account factors such as trading fees, platform features, and customer support.
Open a brokerage account: Once you’ve selected a broker, open an account with them. You’ll typically need to provide personal information and funding for your account.
Place an order: With your account funded, place an order to buy ChatGPT stocks. You can do this through your broker’s trading platform or by contacting their customer service.
Monitor your investment: Keep an eye on your investment to stay informed about any significant changes in ChatGPT’s performance or the broader market. Make adjustments as necessary to maximize your investment’s potential return.
Direct Investment in OpenAI
One of the most straightforward ways to invest in ChatGPT is by investing directly in OpenAI. OpenAI is currently a private company, meaning that its shares are not available on any public stock exchanges. However, it is possible to invest in OpenAI through its private stock offering, which is available to accredited investors only.
OpenAI is one of the world’s most valued private company, with a valuation of over $20 billion. The company has received significant investment from some of the biggest names in tech, including Microsoft and Amazon, and has partnerships with several major corporations. However, investing in OpenAI requires significant capital and is only available to a select group of investors.
Investors interested in direct exposure to ChatGPT should monitor news regarding its potential initial public offering (IPO). While an IPO is not currently planned for OpenAI as of late January 2023, the Wall Street Journal reported on January 5th that the AI lab is discussing the sale of at leastUS$300 million worth of existing shares to venture capital firms.
Investing in Companies that Use AI Technology
Investors who are interested in investing in ChatGPT may consider investing in the companies that use the technology, rather than investing directly in OpenAI. Some of the companies that use ChatGPT include UiPath, Zendesk, and LivePerson.
UiPath is a leading provider of robotic process automation (RPA) technology. The company has integrated ChatGPT into its platform to provide intelligent automation capabilities that can understand and respond to natural language queries. UiPath went public in April 2021.
Zendesk and LivePerson are two additional companies that use ChatGPT to power their conversational AI capabilities. Zendesk is a customer service software provider that allows businesses to manage customer interactions across various channels. The company went public in 2014. Finally, LivePerson is a cloud-based customer engagement platform that debuted on the public stock exchange in the year 2000 and offers chatbots and virtual assistants to help businesses connect with their customers.
Investing in ETFs Focused on Emerging Technologies
Investors who are interested in investing in emerging technologies such as ChatGPT may consider investing in ETFs that focus on the sector. There are several ETFs that invest in emerging technologies such as artificial intelligence, robotics, and automation, which are all areas that ChatGPT could be considered a part of.
One example is the Global X Robotics & Artificial Intelligence ETF (BOTZ), which invests in companies that are involved in the development and production of robotics and AI technologies. Another example is the iShares Robotics and Artificial Intelligence ETF (IRBO), which tracks an index of companies involved in the development of robotics and AI technologies. A third example is the Autonomous Technology & Robotics ETF (ARKQ), an ETF with a portfolio of more than 50 companies that focuses on businesses that are developing autonomous vehicles, robotics, energy storage, and automation including Tesla, Baidu, and Google parent company, Alphabet.
Investing in ETFs offers investors a diversified portfolio of AI-focused companies, which can reduce the risks associated with investing in individual companies. However, it’s important to note that the performance of these ETFs can be impacted by factors other than ChatGPT’s technology and come with management expenses.
Benefits to consider when buying ChatGPT stocks
The benefits of investing in ChatGPT stocks can range from its competitive advantage, ability to provide investors with exposure to a diversified set of companies across different industries and therefore reducing overall investment risk, and the rapid industry growth driving increased demand for ChatGPT technology and other natural language processing tools.
The technology has already been adopted by major corporations, and its potential applications have the potential to be vast. Additionally, ChatGPT is generally considered to have a strong team of founders and investors, adding to its credibility and potential for success.
Limitations to consider when buying ChatGPT stocks
Some oft-cited limitations of investing in ChatGPT stocks include the high volatility and uncertainty associated with emerging technologies, as well as potential competition and regulatory risks.
There is also the possibility of limited liquidity and the need for extensive research and analysis to identify the most promising investment opportunities.
ChatGPT Stocks: Bulls vs. Bears Cases
Investing in ChatGPT stocks, like any other investment, has potential risks and rewards. Some key points from ChatGPT stock industry bulls include ChatGPT’s potential to revolutionize industries, such as customer service and healthcare, and its ability to adapt and improve through machine learning. They also point to the high demand for AI technologies, the company’s success, and the potential for ChatGPT to become the dominant player in the natural language processing market.
On the other hand, industry bears include the potential risks of investing in emerging technologies like ChatGPT, the competition from other natural language processing technologies, and the possibility of regulatory challenges. They also note the high valuation of OpenAI and the possibility of market saturation in the AI industry, which could limit the growth potential of ChatGPT stocks.
Where to research ChatGPT stocks
To research ChatGPT stocks, investors should first learn more about OpenAI, the company behind ChatGPT. They can also review financial reports, earnings calls, and news articles about the company and its competitors in the AI industry. They can also monitor industry trends and analyze the potential market demand for natural language processing technologies like ChatGPT. Platforms like Public offer in-context education, such as audio shows and reports covering the emerging AI industry, including new players and AI’s implications on big tech stocks like META, GOOG, and MFST.
Investing in ChatGPT stocks has the potential for significant growth, given the rapid development of artificial intelligence technology and the increasing demand for natural language processing. However, as with any investment, it is important to have a diversified portfolio and conduct thorough research before making any decisions. By staying up to date on the risks and rewards associated with ChatGPT stocks and industry trends, investors can make informed decisions that align with their investment goals and objectives.
FAQs:
What is ChatGPT?
ChatGPT is a generative AI tool brought to market by OpenAI, which is a private company. ChatGPT uses machine learning to provide text-based responses based on various prompts, and can deliver copy within different parameters, like tone, style, and length. Since OpenAI is not publicly-traded, you cannot yet invest in this company; however, various public companies and tech platforms have begun to incorporate this tool and similar generative AI products into their offerings. Microsoft (MSFT) is a significant strategic investor in OpenAI.
What is generative AI?
Generative AI uses algorithms and machine learning to create new content. Generative AI formats include text-based (such as ChatGPT), image-based (Dall-E), and video-based. With generative AI, human beings guide technology to produce desired outputs, inputting the initial insight or idea and letting the AI do the heavy-lifting in terms of content generation.
What’s the best way to invest in AI?
Investors can invest in AI as a megatrend in a variety of ways. One approach would be to research stocks that are AI-centric, or those that are leaning in heavily to AI development as part of their offerings. There are also a number of AI-focused exchange-traded funds, which allow you to invest in AI as a theme with built in diversification. ETFs focused on AI hold positions in a basket of stocks relevant to AI, with investors being able to buy shares of the ETF in order to gain broad exposure to AI.
Which only platforms provide opportunities to invest in AI as a theme?
Public is one example of an investing platform that offers the ability to research stocks for AI exposure, learn about companies that are building in AI, and search and invest in AI-relevant stocks. Public provides content, data, and metrics that make it easy for investors to conduct research in the same place they invest.
