Are Chatbot Stocks Set to Explode in 2023?

OpenAI’s ChatGPT is considered to be a breakthrough in the artificial intelligence (AI) space. The chatbot hit 100 million users only two months after its launch. Currently, it seems like ChatGPT is practically synonymous with the AI space.

The AI revolution is still in the very early stages of development, and the buzz surrounding ChatGPT may be causing investors to disregard promising companies that are ready to see big benefits from this evolving tech trend.  

In this article, we’ll look at ChatGPT, an AI chatbot that could present an investment opportunity, and explore whether you should invest in AI chatbot stocks today.

About ChatGPT

ChatGPT is a natural language processing tool driven by artificial intelligence. The chatbot was developed by OpenAI and launched in November 2022.

Essentially, ChatGPT can answer questions and help with tasks like writing emails, essays, and code. So, chatbots are AI systems that engage in spoken or written dialogue. They usually power customer service sections of company websites as well as virtual assistants like Siri or Alexa.

Some experts are concerned that AI bots like ChatGPT will simply replace human workers, push down wages and worsen inequality.

What are AI chatbots?

AI chatbots are artificial intelligence-based computer programs that use natural language processing to communicate with humans via texts. Chatbots are a common tool used in customer service, internet search, and other routine tasks for internet users. Businesses also use AI chatbots internally to help automate workflows and other tasks.

Investor interest in the technology has rocketed since OpenAI demonstrated the capability of AI chatbots.

ChatGPT has raised the bar for chatbot

With innovations like self-driving cars to surgery-performing robots, artificial intelligence (AI) is helping to transform every part of our lives. The potential opportunity created by this high-growth, multi-billion-pound market has triggered a wave of corporate investment.

ChatGPT has certainly raised the bar for chatbots and introduced consumers to a form of AI known as generative AI. As well as ChatGPT, there are several virtual assistants and other tools available on the market, including Amazon’s (Nasdaq: AMZN) Alexa, Apple’s SIRI, Microsoft’s Cortana, and Alphabet’s Google Assistant.

The potential of ChatGPT

The new AI-powered chatbot has only been around for a few months, but it has already started to make major waves. Let’s look at some of the potentials of ChatGPT.

Generative AI is changing the landscape

A recent report in the New York Times states that Microsoft depends on its strong financial position and the power of AI tools to be on the frontline of generative artificial intelligence. Amazingly, it was revealed that ChatGPT passed an MBA exam given by a Wharton professor. Teachers have reported that students are writing essays with the AI-powered tool. Many companies have started using the tool to create content as the list of uses sways between fun and functional.

The paid version of ChatGPT is coming

In the U.S., OpenAI recently launched a pilot subscription program for users, known as ChatGPT Plus, starting at $20 a month. The paid subscription will give users better response times and early access to new features, as well as access to the service even during peak traffic. The company is also exploring lower-priced ChatGPT plans. In addition, OpenAI is looking to target business users as well.

ChatGPT could be the “iPhone moment” for AI

While the ChatGPT tool hasn’t directly had an impact on Apple yet, many experts consider the release of this product the “iPhone moment” for AI due to the capabilities of machine learning coming to the forefront of public consciousness. Ever since the iPhone was launched in 2007, it has changed how fast and productive a smartphone can be. ChatGPT has the potential to do the same for AI.

Microsoft makes a major investment in ChatGPT technology

As AI chatbots have improved, the market potential for the technology has increased. ChatGPT’s owner, OpenAI, has partnered with tech giant, Microsoft. Microsoft first formed a strategic partnership with OpenAI in 2019 and recently invested $10 billion in OpenAI after ChatGPT was launched. This shows Microsoft’s confidence in the new AI chatbot.

The ever-increasing popularity of ChatGPT puts Microsoft in a solid position in the generative AI market which is expected to expand from just $10 billion in annual revenue in 2022 to over $200 billion in 2032.

Microsoft will get a 75% share of OpenAI’s profits

Microsoft has already set itself up to take advantage of the potential of ChatGPT. Tech giant, Microsoft, will get a 75% share of of OpenAI’s profits following its $10 billion investment in the company. When it makes back the money on its investment, the tech giant will have a 49% stake in the ChatGPT operator.

Artificial intelligence is set to revolutionise everyday life

According to market research firm Grand View Research, artificial intelligence is set to revolutionise our everyday lives. They forecast an annual growth rate of 40% in the global market over the next few years.

For investors looking to add AI-related stocks to their investment portfolio, there is a wide range to choose from, including semiconductor chip producers to car manufacturers pioneering self-driving vehicles.

On the other hand, investors should also contemplate the risks of investing in AI stocks. It is still early days for some of the technology, and it’s unclear who the ultimate ‘winners and losers in the race to capitalise on this potential opportunity will be.

Some of the negative aspects of AI are the high initial set-up costs, risks to employment, complex algorithms, lack of regulatory scrutiny and risk of overtaking humanity. As AI is still quite a new area, volatility will be expected.

As a result of these risks, investing in AI stocks should form only a small part of a diversified investment portfolio.

Should you invest in AI chatbot technology?

AI chatbot technology is still in early development. However, it seems obvious, from the billions being spent on it by the world’s biggest tech companies, that this will be a significant computing platform.

ChatGPT has a wide range of applications and its potential to disrupt internet search, a market worth hundreds of billions of dollars, shows how valuable AI chat is.

Since more chatbots will probably come on the market soon, it makes sense to gain exposure to the technology, considering its potential. As with all emerging technology, investing in AI chatbots carries some risk.

Disclaimer:

This information is not considered investment advice or an investment recommendation, but instead a marketing communication. IronFX is not responsible for any data or information provided by third parties referenced or hyperlinked, in this communication.