Can you invest in ChatGPT? There are two answers to that question. First, no you cannot. OpenAI, the company behind the software called ChatGPT, is not publicly traded. Second, that doesn’t mean you cannot invest in AI at all.
You can get into this industry by investing in companies like Microsoft, Google and other firms that are tied to developing the new generation of AI technology. Here’s what you need to know.
Why Invest In AI?
Depending on who you are, AI is about to change everything all at once or nothing at all. Since the release of art-bot AIs like DALL-E and chatbot AIs like ChatGPT, some observers have rushed to dub this the dawn of a new age. Occasional enthusiasts have literally compared the invention of AI to the industrial revolution or even the invention of agriculture itself.
On the other end of the spectrum, skeptics have dismissed the current generation of artificial intelligence as little more than a digital party trick. These writers have rushed to point out every mistake made by the nascent, still-in-beta products as proof that the underlying technology is irredeemably flawed.
Where this will all land is hard to say. Normalcy bias is a powerful thing, so the “nothing to see here camp” might be based on little more than the assumption that since a digital mind didn’t exist yesterday, it cannot exist tomorrow. On the other hand, right now ChatGPT could be a difference of degree masquerading as a difference of kind. It does the same thing that computers have always done best, finding patterns in existing data, just on a massively expanded scale.
What seems most likely, as the consulting firm McKinsey writes, is a “fourth industrial revolution,” in which advanced software gains the ability to automate non-routine tasks. This would be a massive leap forward in technology, akin to when computers gained the ability to automate repetitive and routine functions, and is certainly worth paying attention to on both a social and a financial level.
How Can You Invest In ChatGPT?
As a threshold level, you cannot invest in ChatGPT. ChatGPT is the big name in AI at time of writing, although the field is moving so quickly that may no longer be the case by the time you read this. It is a software package produced and owned by OpenAI, which is a private company based in San Francisco.
If you are an accredited investor, it’s theoretically possible that you could buy an ownership stake in OpenAI by purchasing privately held shares. But their investor list includes some of Silicon Valley’s most influential billionaires, so it might take an eight-figure check to even get someone returning your calls. If that is your profile, though, you are most likely better off investing through one of the venture capital firms that own a stake in OpenAI, including Sequoia Capital or Andreessen Horowitz.
For retail investors, generally the closest you can get to investing in ChatGPT is by purchasing shares of Microsoft (NASDAQ:MSFT) stock. The company has invested more than $10 billion into the company, giving it a significant ownership and profit stake and access to OpenAI’s software as the basis of a next-generation version of the search engine Bing.
Beyond that, you can invest in companies that have a relationship with OpenAI’s product and success.
On the back end, this can mean investing in vendors who provide the hardware and software solutions that ChatGPT relies on. The most noteworthy company there would be NVIDIA (NASDAQ:NVDA), which produces the advanced chipsets used for artificial intelligence machines. The share price has been rocketing skyward since Oct. 10, 2022, when the stock traded at $112.27 to June 1, 2023, when it was trading at approximately $400.
On the front end, you can invest in companies that intend to use ChatGPT in their own products. Several firms have announced strategic partnerships with OpenAI to begin integrating the artificial intelligence into their own lines, such as Salesforce (CRM) and Snap (SNAP). One report by Forbes even suggests that Coca-Cola (KO) may integrate OpenAI into its business model.
It’s not the same as investing directly in OpenAI itself, but it still will give your portfolio exposure to ChatGPT as a product.
How Can You Invest In AI?
Beyond investing in OpenAI, you can also look to invest in AI as a field overall. Over the past year, artificial intelligence has become a sort of four-minute mile. Nobody could build a system remotely like DALL-E or ChatGPT just a few years ago. Now, new breakthroughs emerge every few weeks from any number of places. So a good way to invest might be by looking for those other companies.
The most prominent AI companies right now are probably firms like Alphabet (NASDAQ:GOOG), Tesla (NASDAQ:TSLA) and Amazon (NASDAQ:AMZN). All three are either heavily invested in their own artificial intelligence software or are helping to develop third-party programs. This is generally the closest thing you can get to investing in OpenAI, since in all three cases you will be investing in a firm developing AI software.
Beyond that, as with ChatGPT partnerships, you can begin looking for companies that will thrive on artificial intelligence. With this approach, your goal is to try to identify firms that can take advantage of the opportunities that AI offers. What sectors and companies will use this tool? Who will become more profitable in the long run because of it?
One way to answer this is by investing in the technology sector in general. You can buy stock in exchange-traded funds (ETF) or mutual funds that are indexed to the tech sector, or funds which are indexed to the NASDAQ market.
You can also try to identify firms and sectors that will do well with artificial intelligence technology, such as companies that do automated customer service, large data-management firms and logistics companies. All of these are sectors that need to handle large volumes of data with complex, non-routine outputs, which is exactly what AI is likely to specialize in.
You cannot invest directly in OpenAI, the company behind ChatGPT, but that doesn’t mean you can’t invest in artificial intelligence. By seeking out companies and sectors most likely to profit off of data-driven, non-routine transactions, you can find companies that will likely thrive on this technology.
This post originally appeared at ValueWalk