ChatGPT's US$8t birthday gift to Big Tech
The tech sector has driven a 30% gain in the S&P 500 since Jan 2022, while small-cap companies have seen a more modest 15% return.
Saturday (Nov 30) marked two years since OpenAI posted an oddly named widget called ChatGPT to the Web.
Its staff placed bets on how many users it would accumulate, with the highest estimate being 100,000. However, ChatGPT quickly became the fastest-growing app in history, with about 200 million active users today.
When ChatGPT first came out, social media was ablaze with examples of how this fluent little text box was a leap ahead of Amazon’s Alexa or Apple’s Siri. It could write poems and high school essays, potentially reshaping Hollywood and the education system.
Over the past two years, the biggest beneficiaries of artificial intelligence (AI) are a handful of tech firms, with the six biggest seeing their market capitalizations grow by more than US$8 trillion since ChatGPT’s launch.
Nvidia has surpassed Advanced Micro Devices and Intel to become the world’s top chip company, while cloud revenue has accelerated for Microsoft, Amazon, and Alphabet’s Google.
The Impact of AI on the Market
The tech sector has seen significant gains, defying the trend of small and mid-cap companies outperforming their larger counterparts over the previous two decades. As hype about an AI revolution grips the market, businesses scramble to remain competitive, leading to a concentration of wealth among the top tech firms.
The Role of Consulting Giants in the AI Revolution
Consulting giants have played a significant role in the AI revolution, with McKinsey, IBM, and Accenture seeing substantial business related to generative AI. While the hope is for startups and non-tech firms to benefit from AI transformation, challenges remain, with tech giants potentially undermining smaller players by replicating features.
Challenges for Entrepreneurs in the AI Space
Entrepreneurs in the generative AI space face challenges in competing with larger players and must find ways to differentiate themselves. Focusing on niche products for specific sectors like healthcare, law, and finance can provide opportunities for growth and protection from tech giants.
There is optimism that a shift towards selling smaller, task-focused AI models may democratize the AI landscape, making it more accessible to a broader range of businesses. This shift could lead to a more democratic phase in AI development, lowering barriers to entry for smaller players.
Looking Towards the Future
As AI capabilities plateau, businesses have the opportunity to integrate generative AI into their processes and evaluate its impact. While ChatGPT has significantly impacted the finances of tech giants, the next phase of AI development may hold promise for smaller players and specialized models.
While the revolution promised to reshape the world, it has primarily extended the wealth and influence of Big Tech. The power of AI in making the world’s most powerful companies even more dominant is a surprising outcome of this technological advancement.
