Since its release, ChatGPT has generated massive investor confidence, especially in 2023. Not necessarily in ChatGPT itself but in the potential of AI.
In the first half of 2023, venture capitalists (VCs) invested nearly five times as much in generative AI firms as during the same period in 2022. Statistics on Crunchbase Data said Generative AI and AI-related startups raised almost $50 billion in 2023 from VCs.
And that’s just VCs. Businesses are also interested, with one example being Google, investing $30.7 billion in AI by mid-2023, led by Bard (now Gemini).
What triggered this mass investment by VCs and brands? ChatGPT-4. Well, ChatGPT, but the 4.0 model changed the game entirely.
Read on to learn more.
ChatGPT-4’s Seismic Impact on the Tech Sector
ChatGPT-4’s changed the world – you can’t argue with that. It forced AI into the eyes of the average Joe, and it forced it into the eyes of investors. How could you ignore tech that gained over 100 million users within two months and a hefty $1 billion investment from Microsoft in 2019? Microsoft then invested $10 billion in January 2023, further solidifying the confidence in the tech.
And by mid-2023, ChatGPT was impossible to ignore. By March 2023, ChatGPT-4 was active, and the world went crazy. VCs then closed a $300 million share sale at a valuation of $27 billion – $29 billion.
Investor confidence was given a real boost, as evidenced by FINQ’s 2023 financial analysis report, which examines the market’s performance from the perspective of its own smart AI investment platform. Alongside a host of other market highlights from the year, FINQ acknowledges GPT-4’s role in changing the outlook on the tech sector. This technology rejuvenated an industry that was already a dynamic and promising area for investors, leading to an unprecedented surge of fresh interest that was felt not just by FINQ themselves, but by the market as a whole.
At the beginning of 2024, confidence is higher than ever. We’ve already talked about Google, but pretty much every major brand is investing in AI technology. Microsoft has deeply integrated ChatGPT-4 within its growing services, including Bing and GitHub Co-Pilot. Microsoft has invested almost $15 billion in total in ChatGPT.
Duolingo’s use of GPT-4 to provide language learning tools and interactive AI-driven practices shows how AI can personalize and enrich educational experiences. The investment into AI helped Duolingo generate $531.1 million in revenue during 2023, a 44% increase from the previous year.
What’s Making Investors So Confident?
The confidence is simply in the technology. AI’s ability to augment human capabilities, automate complex tasks, and deliver innovative solutions has created growth and efficiency. And now the technology is used across several industries, tech and beyond, confidence continues to grow.
ChatGPT-4 has unique benefits by enabling companies to work smarter, not harder. For example, Slack’s integration of ChatGPT to enhance workflow and productivity exemplifies how AI can streamline operations.
The transformative power of AI-based business models is evident in their ability to adapt and evolve rapidly, and investors want to put their money into a business that will adapt and evolve rapidly.
Just the Very Beginning…
It really is just the beginning. ChatGPT is only three years old this year, and ChatGPT-4 is one year old. And anticipation is growing for ChatGPT-5. If the impact on investor confidence was so massive with ChatGPT-4, it’ll be interesting to see what the 5.0 model will do.
Yes, there are limitations – we must stay realistic. Let’s not forget the issues with bias and misinformation, and the rise of deep fakes that could hinder investor confidence. At least temporarily.
Adopting AI like ChatGPT-4 at a breakneck pace without consideration for its limitations could lead to pitfalls, including overreliance on automation, overlooking the importance of human oversight, and potential biases in AI-generated content.
The massive increases in investment generated by VCs and businesses since the release of ChatGPT prove investor confidence in the tech is high.
And we can see why – in 2023, the AI (not only ChatGPT) market size was $207.9 billion, up 46.08% from 2022, with a prediction of increasing by 43.46% (total value of $298.25 billion), by the end of 2024. No wonder investors are confident.
