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Privately owned research and corporate finance firm Lodge Partners recommends a ‘speculative buy’ for BlinkLab’s (ASX:BB1) autism spectrum disorder (ASD) and attention deficit hyperactivity disorder (ADHD) diagnostic app.
Lodge Partners’ initial research report also valued BlinkLab at $1.30 using a future and probability-weighted discounted cash flow model.
“We assume BB1’s app has a better than even chance to be commercialised due to having a predicate device on the market and the data on hand. We further assume a minimal penetration rate in the first few years before rising to 10 percent of the diagnostic market by 2031 and pricing of US$250/test,” the report said.
“Similarly, we assume BB1 will penetrate 10 percent of the ADHD diagnostic market by 2031. Using a 15 percent discount rate we find BB1 with a valuation of $1.30/share. This valuation is only based on the US market and has significant upside should we include (the) rest of world.”
BlinkLab’s technology
BlinkLab’s technology for detecting ASD and ADHD targets children from 18 months of age to 72 months. Automated facial recognition and image processing techniques analyse the data and test for several biomarkers which give an indication of the child having ASD or ADHD with high sensitivity and specificity.
Highlights of the Report
- Closest competitors, Cognoa and EarliTec Diagnostics, have measured lower sensitivity and specificity of 52 percent/19 percent and 71 percent/81 percent, respectively.
- The ASD diagnostic market is estimated to grow at a CAGR of 8 percent annually and potentially grow to US$5.4bn by 2036.
- The earlier and faster a child can be diagnosed will lead to better outcomes and it is currently an unmet need.
For the full analyst report, click here.
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BlinkLab Limited
Investor Insight
BlinkLab’s transformative AI-based healthcare technology is at the forefront of innovations in the global medical field that are quickly gaining traction among keen investors.
Overview
BlinkLab (ASX:BB1) offers a smartphone-based diagnostic platform that leverages computer vision, artificial intelligence (AI) and machine learning (ML). A company started by neuroscientists at Princeton University, Blinklab has developed its novel technology over several years, providing an app-enabled, smartphone-based diagnostic tool for evaluating children with neurodevelopmental conditions such as autism and ADHD.
The app turns a smartphone into a diagnostic tool that helps to conduct remote and rapid tests that can assist in diagnosing neurodevelopmental conditions. BlinkLab’s smartphone app provides a screening tool that can help with diagnoses much earlier than the age that children are typically assessed at present (approximately 5-6 years old). It is also a remote (i.e., accessible) and inexpensive means of beginning the assessment process, which can typically be very costly and take up to multiple years currently.
BlinkLab’s smartphone app facilitates early diagnosis, reduces costs, and improves accuracy.
BlinkLab’s smartphone-based technology, which uses AI and machine learning (ML), makes it attractive to investors. Like other industries, AI is becoming very popular in the healthcare sector. According to Statista, the AI healthcare market is expected to proliferate from $11 billion in 2021 to $187 billion in 2030. The increasing use of AI is driven by advanced ML algorithms, access to data, and use of 5G technology. AI and ML technologies can evaluate and analyze enormous volumes of data faster than humans.
Artificial intelligence, and particularly machine learning, has the potential to serve as the great equaliser for many behavioural healthcare concerns like autism. According to recent data, 97 percent of adults in the United States own a cellular device, and nine in ten own a smartphone. A 2022 Global State of Digital report by We Are Social shows 66.9 percent, or about 5.34 billion, of the world’s population are mobile users. As these percentages continue to rise and internet-powered devices become ubiquitous, access to digital health services can become democratised on a global scale. While autism spectrum disorder (ASD) services are currently restricted to relatively privileged populations, digital solutions powered by emerging data, science, and methodologies can make access to autism therapy more accessible.
Large players are investing in this segment to tap into the vast potential of these new technologies. One such example was Pfizer’s acquisition of ResApp. In October 2022, Pfizer acquired Queensland University startup ResApp Health for $179 million. ResApp developed a smartphone technology to detect respiratory diseases using cough analysis accurately.
Furthermore, big tech companies such as Apple, Amazon, Microsoft and Alphabet are also now venturing into the AI healthcare market.
Company Highlights
- Australia-based BlinkLab (ASX:BB1) is focused on transforming mental healthcare through an AI-enabled smartphone application, a breakthrough technology developed with Princeton University.
- The company’s innovative approach leverages the power of smartphones, AI and machine learning to deliver screening tests specifically designed for children as young as 18 months old. This marks a significant advancement, considering traditional diagnoses typically occur around five years of age, often missing the crucial early window for effective intervention.
- Once approved by regulators, this cutting-edge digital technology is poised to capture the imagination of both investors and major pharmaceutical companies, eager to embrace transformative solutions in healthcare.
- BlinkLab is led by an experienced management team and leading experts in the field of machine learning, autism and brain development, bridging the most advanced technological innovations with groundbreaking scientific research. The company is chaired by Brian Leedman, an experienced biotechnology entrepreneur and founder of ResApp Health, a digital diagnostic company recently acquired by Pfizer.
Key Technology and Applications
Neurobehavioral assays of brain function can reveal fundamental mechanisms underlying neuropsychiatric conditions, but typically require centrally located equipment in a laboratory test facility. Consequently, these tests are often unpleasant for participants, as they often require instruments attached to their face and cannot be used at scale in daily clinical practice, particularly with paediatric patients.
BlinkLab has developed a smartphone-based software platform, known as ‘BlinkLab Test’, to perform neurobehavioural testing that is free from facial instruments or other fixed location equipment.
This AI-based platform is designed to be used at home or in similarly comfortable environments, either independently or with the assistance of a caregiver, while following instructions from the smartphone application. The tests include, but are not limited to, eyeblink conditioning (EBC), which is a form of sensory-motor associative learning, prepulse inhibition of the acoustic startle response (PPI), which measures the ability to filter out irrelevant information through sensorimotor gating, startle habituation, which measures the ability for the intrinsic damping of repetitive stimuli and sensory adaptation, and habituation of the eye blink response, which serve as biomarkers for neurological and psychiatric disorders.
The BlinkLab Test App combines a smartphone’s ability to deliver stimuli and acquire data using computer vision with a secure cloud-based portal for data storage and analysis. In the tests, each audio and/or visual stimulus is presented with millisecond-precise control over parameters such as timing, amplitude and frequency. To maintain participant attention, an entertaining movie of choice is shown with normalised audio levels. Participants’ responses are measured by the smartphone’s camera and microphone, and are processed in real time using state-of-the art computer vision techniques. Response data is then fully anonymised, and transferred securely to the analysis portal. There, BlinkLab’s in-house AI/ML algorithms then perform clustering and statistical analysis to identify the prediction value of the experiment in the particular data set.
BlinkLab Test was initially developed as a prescription diagnostic aid to healthcare professionals (HCP) considering the diagnosis of ASD in patients 18 months through 72 months of age that are at risk for developmental delay. In collaboration with Princeton University in the United States and Erasmus Medical Center in the Netherlands, the company has conducted several trials using BlinkLab Test as an early assessment tool for autism. Autism represents a global challenge, with 1 in 36 children in the U.S. having autism, up from the previous rate of 1 in 44. With no early tests currently available to detect the condition, many children are diagnosed with the condition as late as the age of five.
Blinklab’s mobile app can aid in early detection, facilitating diagnoses as early as two years of age and resulting in earlier personalised interventions and monitoring. The testing process is also far more comfortable than traditional means of diagnoses, as the child can watch their favourite movie or cartoon on the phone, and the app will record their reactions, providing key information on the functioning of the brain.
BlinkLab will be subject to regulatory oversight as a medical device and must clear clinical studies. Previous clinical trials completed by Blinklab have shown impressive indicators of success, achieving sensitivity levels of 85 percent and specificity levels of 84 percent. The company notes that these trials are very similar to those that are required by the United States Food and Drug Administration (FDA) for approval and have shown much higher levels of accuracy compared to currently approved products.
In order for the BlinkLab Test technology to be used as a clinical aid in the diagnosis of ASD, BlinkLab will need to complete a pivotal registrational study, and subsequently apply for FDA registration and reimbursement for the tests. The registrational study intends to recruit up to 500 subjects. Enrolment for this study is expected to begin in 2024, with study completion expected by mid-2025. The potential to participate in a disruptive and scalable AI-powered technology close to regulatory approval should attract attention from big medical technology companies.
Research and clinical studies
BlinkLab engages and partners with research and medical institutions across the globe to further test and develop its technology.
In May 2024, BlinkLab initiated a clinical study in partnership with US-based Turning Pointe Autism Foundation to enroll up to one hundred children previously diagnosed with autism and one hundred children without an autism diagnosis. The data obtained during this collaboration will be used to finalise the data collection and processing algorithms and AI/ML models ahead of the FDA registrational study.
The company is also participating in a clinical study of patients with spinocerebellar ataxias, conducted by Columbia University, New York, to study the effect of aerobic physical exercise on neuroplasticity in adults with spinocerebellar ataxias (SCA).
To further improve and accelerate the diagnostic evaluation of ADHD, BlinkLab forged a major research and clinical partnership with Mental Care Group (MCG) in The Netherlands, the fifth largest outpatient mental health care provider in Europe.
To validate BlinkLab’s platform for the assessment of functional neurological disorder (FND), the company has partnered with Bates College in Maine for a clinical study that aims to characterise the behavioural time course of Pavlovian eyeblink conditioning and acoustic startle habituation. It will validate the BlinkLab smartphone test for use as a remote neurobehavioral testing and diagnostic tool for FND.
At Erasmus University Medical Center, BlinkLab’s smartphone-based remote assessment, including eyeblink conditioning and prepulse inhibition of the acoustic startle reflex, is being used, among other tools, in a clinical study to set-up an overarching at-home testing lab, named the Digital Dementia Lab, to identify, develop and test a variety of digital biomarkers
measuring clinically relevant behaviour for improving early accurate diagnosis of dementia.
BlinkLab is also working with Monash University in Australia to evaluate BlinkLab as a medical device for monitoring the therapeutic effects of ketamine on cognitive processes whereby sensory information is converted into decision making. Results from this study can help facilitate cognitive behavioural therapy outcomes in patients with psychiatric conditions such as depression, schizophrenia, epilepsy, and post-traumatic stress disorder.
BlinkLab also recently signed a partnership for more clinical trialling with INTER-PSY, a large centre in the Netherlands that specialises in autism, offering assistance with diagnostics and treatments. This study also mirrors the study design of the Company’s developing FDA regulatory trial, which will be needed for future approval of BlinkLab Test as an approved diagnostic tool in the United States.
Management Team
BlinkLab is led by an experienced management team and directors with a proven track record in building companies and vast knowledge in digital healthcare, computer vision, AI and machine learning. The company’s chairman, Brian Leedman, is an experienced biotechnology entrepreneur and founder of ResApp Health, a digital diagnostic company for respiratory conditions, which was recently acquired by Pfizer for $179 million before reaching FDA approval for their main diagnostic product.
Dr. Henk-Jan Boele – Founder and Chief Executive Officer
Henk-Jan Boele is an assistant professor of neuroscience at the Medical Center of Erasmus University and a researcher at Princeton University. He obtained his PhD from Erasmus University in 2014. Boele has always been pushing scientific and methodological boundaries, and received numerous government and industry grants in the field of neuroscience.
Peter Boele – Founder and Chief Technology Officer
Peter Boele holds a bachelor’s degree in history and philosophy from Leiden University. He has over 20 years of experience in software development and has worked with Erasmus University, Leaseweb, Kaboom Informatics and Insocial.
Dr. Anton Uvarov – Founder and Chief Operational Officer
Anton Uvarov holds a Ph.D. from the University of Manitoba and an MBA from the Haskayne School of Business. He has rich experience in bio-technology investments with a particular focus on neuroscience and has successfully led several IPOs. He started his career as a biotechnology analyst with Citigroup, US.
Dr. Bas Koekkoek – Founder and Chief Scientific Officer
Bas Koekkoek is an assistant professor at Erasmus Medical Center. Koekkoek has been working at the Department of Neuroscience mainly in the role of rapid prototype of new technology and techniques for neuroscience. He has numerous publications in the area of brain development including Nature and Science journals.
Professor Sam Wang – Founder and Chair of Advisory Board
Sam Wang holds a PhD from Stanford University. He is a professor of neuroscience at Princeton University, has published over 100 articles on the brain in leading scientific journals and has received numerous awards. He gives public lectures on a regular basis and has been featured in The New York Times, The Wall Street Journal, NPR, and the Fox News Channel.
Professor Chris de Zeeuw – Founder and Scientific Advisor
Chris de Zeeuw is chairman of the Department of Neuroscience at Erasmus MC in Rotterdam and vice-director at the Netherlands Institute for Neuroscience in Amsterdam. De Zeeuw has received over 100 grants, including the Pioneer Award from ZonMw and the ERC advanced grant. In 2006, he received the Beatrix Award for Brain Research from Her Majesty the Queen; in 2014, he became an elected member of the Dutch Academy of Arts & Science; and in 2018, he received the international Casella Prize for Physiology.
AI Stocks: 9 Biggest Companies in 2024
Here the Investing News Network profiles some of the biggest AI stocks by market cap on US, Canadian and Australian stock exchanges. Data for this AI stocks list was gathered on September 27, 2024, using TradingView’s stock screener.
American AI stocks
According to Tracxn Technologies, the number of US AI companies has more than doubled since 2017 with over 82,541 companies working in the sector today.
One of the major factors fueling growth in the American AI market, states Statista, is “the growing investments and partnerships among technology companies, research institutions, and governments."
Below are three of the top US AI stocks organized by market cap.
1. Microsoft (NASDAQ:MSFT)
Market cap: US$3.188 trillion
Share price: US$428.91
In addition to the reported billions Microsoft is committed to investing in OpenAI, the technology behemoth has built its own AI solutions based on the chatbot creator’s technology: Bing AI and Copilot. OpenAI officially licensed its technologies to Microsoft in 2020.
An update to Windows 11 in 2023 integrated the Bing chatbot into the operating system's search bar, allowing users to interact with the chatbot directly with Microsoft's Edge browser, Chrome and Safari.
Microsoft’s moves into generative AI have translated into higher revenues for its Azure cloud computing business and a higher market capitalization as the tech giant pushed past the US$3 trillion mark in January 2024.
In late May, Microsoft unveiled its Copilot+ Windows PCs, the company's first range of AI PCs, which the company says are the “fastest, most intelligent Windows PCs ever built.”
After receiving criticism over security flaws, Microsoft announced in late September that it has made changes to the Copilot+ exclusive Recall software, which uses AI to create screenshots of everything users do on their computers.
2. NVIDIA (NASDAQ:NVDA)
Market cap: US$2.95 trillion
Share price: US$120.05
The global leader in graphics processing unit (GPU) technology, NVIDIA is designing specialized chips used to train AI and machine learning models for laptops, workstations, mobile devices, notebooks, and PCs. The company is partnering with a number of big name tech firms to bring a number of key AI products to market.
Through its partnership with Dell Technologies (NYSE:DELL), NVIDIA is developing AI applications for enterprises, such as language-based services, speech recognition and cybersecurity. The chip maker has been instrumental in the build out of Meta Platforms’ (NASDAQ:META) AI supercomputer called the Research SuperCluster, which reportedly uses a total of 16,000 of NVIDIA's GPUs.
In the first quarter, Taiwan Semiconductor Manufacturing Company (NYSE:TSM) and NVIDIA released the world's first multi-die chip specifically designed for AI applications: the Blackwell GPU. Blackwell’s architecture allows for the increased processing power needed to train larger and more complex AI models.
In early June, NVIDIA saw its market cap zoom past the US$3 trillion mark to surpass that of Apple (NASDAQ:AAPL). On June 18, its valuation jumped to as high as US$3.34 trillion to briefly pass Microsoft before pulling back. In Q4 2024, the GPU giant is expected to produce 450,000 Blackwell AI chips worth a potential US$10 billion in revenue.
3. Alphabet (NASDAQ:GOOGL)
Market cap: US$2.03 trillion
Share price: US$164.29
Alphabet holds court with both Microsoft and NVIDIA as part of the tech sector’s Magnificent 7, and its foray into AI has similarly brought the tech giant much success. Alphabet's market cap surpassed the US$2 trillion mark in April.
The company has its AI chatbot Gemini, formerly known as Bard, which is integrated into products such as its Google Suite, the Chromecast browser and Google Pixel phone line.
In early April, Google introduced a custom AI chip designed for its cloud services customers. Set to be delivered later this year, the technology uses British semiconductor company Arm Holding's (NASDAQ:ARM) AI architecture. In the same week, Google revealed its new A3 Mega AI processor based on NVIDIA’s H100 Technology.
More recently, Google partnered with automaker Volkswagen (OTC Pink:VLKAF,ETR:VOW) to launch a smartphone app-integrated AI assistant for VW drivers.
Canadian AI stocks
Recognized as a world-leading AI research hub, Canada ranks eighth out of 83 countries in the Global AI Index. Since 2017, the Canadian government has invested hundreds of millions of dollars into accelerating the research and commercialization of AI technology in the country through the Pan-Canadian Artificial Intelligence Strategy.
Research by IBM (NYSE:IBM) says Canadian businesses are increasingly adopting AI, with 37 percent of IT professionals in large enterprises reporting that they have deployed the technology in their operations.
Below are three of the top Canadian AI stocks by market cap.
1. CGI (TSX:GIB.A)
Market cap: C$34.93 billion
Share price: C$154.55
Montreal-based CGI is among the world’s largest IT systems integration companies, and offers a wide range of services, from cloud migration and digital transformation to data analysis, fraud detection and even supply chain optimization. Its more than 700 clients span the retail, wholesale, consumer packaged goods and consumer services sectors worldwide.
Through a partnership with Google, CGI is leveraging the Google Cloud Platform to strengthen the capabilities of its CGI PulseAI solution, which can be integrated with existing applications and workflows.
CGI is aggressively working to expand its generative AI capabilities and client offerings, and is reportedly planning to invest US$1 billion into its AI offerings. In early March, the company launched Elements360 ARC-IBA, an AI powered platform for brokers and insurers to settle accounts in the UK broking industry.
In September, CGI signed the European Union's Artificial Intelligence Act pledge to work for trustworthy and safe AI development.
2. OpenText (TSX:OTEX)
Market cap: C$12.15 billion
Share price: C$44.78
Ontario-based OpenText is one of Canada’s largest software companies. The tech firm develops and sells enterprise information management software. Its portfolio includes hundreds of products in the areas of enterprise content management, digital process automation and security, plus AI and analytics tools. OpenText serves small businesses, large enterprises and governments alike.
OpenText's AI & Analytics platform has an open architecture that enables integration with other AI services, including Google Cloud and Azure. It can leverage all types of data, including structured or unstructured data, big data and the internet of things to quickly create interactive visuals.
Early in the year, OpenText launched its Cloud Editions 24.1, which includes enhancements to its OpenText Aviator portfolio.
"Leveraging AI for impactful results depends on reliable data – without it, even the most skilled data scientists will struggle,” OpenText CEO and chief technology officer Mark J. Barrenechea stated. “By expanding the Aviator portfolio in conjunction with our world class information management platform, Cloud Editions 24.1 empowers customers with the tools and insights needed to get ahead."
3. Descartes Systems Group (TSX:DSG)
Market cap: C$12.08 billion
Share price: C$138.10
Descartes Systems Group provides on-demand software-as-a-service (SaaS) solutions. The multinational technology company specializes in logistics software, supply chain management software and cloud-based services for logistics businesses.
AI and machine learning enhancements to Descartes’ routing, mobile and telematics suite are helping the company’s customers optimize fleet performance.
“AI and ML are perfect extensions to our advanced route optimization and execution capabilities,” Ken Wood, executive vice president at Descartes, said. “From dynamic delivery appointment scheduling through planning and real-time route execution, we’ve used AI and ML to improve our ability to deliver the next level of fleet performance for customers.”
Australian AI stocks
AI investment by Australian companies is projected to increase by 67 percent in 2024, according to BSI's International AI Maturity Model, which would make the country the second best market in the world in terms of boosting AI capabilities. The biggest spenders when it comes to AI in Australia are the banking industry, the federal government, professional services and retail.
Below are three of the top Australian AI stocks by market cap.
1. Xero (ASX:XRO)
Market cap: AU$22.52 billion
Share price: AU$148.72
New Zealand-based technology company Xero provides cloud-based accounting software for small- and medium-sized businesses. The company’s product portfolio also includes the Xero Accounting app, Xero HQ, Xero Ledger, Xero Workpapers and Xero tax tools.
Xero has made a number of AI enhancements to its platform in recent years, including bank reconciliation predictions that save time and reduce errors, and Analytics Plus, a suite of AI-powered planning and forecasting tools.
In March, the company launched its Gen AI assistant, named Just Ask Xero, or JAX. Some of its features include the automation or streamlining of repetitive and time-consuming tasks; the ability to anticipate tasks based on previous user actions and the ability to make cashflow projections on request.
2. TechnologyOne (ASX:TNE)
Market cap: AU$7.84 billion
Share price: AU$23.80
TechnologyOne is another large enterprise technology software firm in Australia. In fact, it is the country’s largest enterprise resource planning SaaS company. TechnologyOne has a client base of over 1,200, including customers in the government, education, health and financial services sectors across Australia, New Zealand and the UK. The company’s research and development center is targeting cloud-based technology, artificial intelligence and machine learning.
Municipalities such as Shoalhaven in the UK are using TechnologyOne AI-based SaaS solutions to manage city services, including waste management and road maintenance.
TechnologyOne's H1 2024 financial results for its fiscal period ended March 31 highlighted its 15th year of record first half revenue, profit and SaaS fees.
3. Weebit Nano (ASX:WBT)
Market cap: AU$351.38 million
Share price: AU$1.86
Israeli semiconductor IP company Weebit Nano develops silicon oxide-based resistive random-access memory (ReRAM) technologies. The company seeks to address the need for significantly higher-performance and lower-power computer memory technology.
Weebit's products can be used to enable edge AI applications and AI systems such as neuromorphic computing. An advancement in AI and machine learning, neuromorphic computing is based on architectures designed to function in the same way as the human brain’s operation.
Weebit says its ReRAM cell “functions similarly to a synapse in the brain, making it a promising solution for neuromorphic computing.” The company is collaborating with research partners in academia and industry to further develop the use of ReRAM for neuromorphic computing.
FAQs for AI stocks
Which company is leading the AI race?
Google and Microsoft are battling it out for king of the AI hill. While Goldman Sachs sees Alphabet’s Google as leading the AI race, other analysts are pointing to Microsoft as the clear frontrunner. Microsoft stands to benefit in a big way from its billions of dollars investment in OpenAI's ChatGPT as advancements in generative AI may have the potential to increase the company's revenues for its Azure cloud computing business.
Which country is doing best in AI?
North America is the global hotspot for advancements in AI technology and is home to the majority of the world’s largest AI providers. Of the countries in this region, Canada’s AI industry is showing the fastest growth, according to a report by Deloitte. Techopedia positions the US as the primary hub for AI development, and many of the world’s leading tech giants are headquartered there. According to the report, China comes in a close second.
What is Elon Musk's AI company?
In November 2023, Elon Musk launched Grok, a new AI technology company based in Nevada. Musk said he was starting it as a "third option" to ChatGPT and Google Gemini. Its Grok chatbot, originally called TruthGPT, is included on Musk's platform X, formerly known as Twitter.
Does Tesla have its own AI?
Tesla (NASDAQ:TSLA) has developed proprietary AI chips and neural network architecture. The company’s autonomous vehicle AI system gathers visual data in real time from eight cameras to produce a 3D output that helps to identify the presence and motion of obstacles, lanes and traffic lights. The AI-driven models also help autonomous vehicles make quick decisions. In addition to developing autonomous vehicles, Tesla is working on bi-pedal robotics.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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Tech 5: OpenAI Closes on US$6.6 Billion in Funding, Cerebras Files for IPO
Stay informed on the latest developments in the tech world with the Investing News Network's round-up.
1. OpenAI concludes latest funding round, exceeding target
OpenAI is predicting its revenue will reach US$11.6 billion next year, significantly surpassing the estimated US$3.7 billion it is projected to make in 2024. A Reuters source says this growth will be driven by corporate sales of its AI features and subscriptions to ChatGPT.
Bloomberg reported on September 11 that the company was seeking US$6.5 billion in a new funding round, drawing interest from venture capital investors and industry peers. OpenAI ultimately raised US$6.6 billion, announced on Wednesday (October 2), resulting in a valuation of US$157 billion, according to a press release.
While OpenAI did not disclose the full list of investors, reports indicate participation from Microsoft (NASDAQ:MSFT), NVIDIA (NASDAQ:NVDA) and SoftBank (TSE:9984), along with several venture capital firms. NVIDIA's contribution of roughly US$100 million marks the company’s first investment in OpenAI. Its share price surged over 3 percent from Wednesday’s close on Thursday (October 3) morning. The company gained 5.69 percent this week.
NVIDIA's performance, September 30 to October 4, 2024.
Chart via Google Finance.
While Apple (NASDAQ:AAPL) was rumored to be considering participation in the funding round, the Wall Street Journal reported on Monday (September 30) that the company ultimately decided not to invest.
Its share price is down over 2 percent for the week.
The funding round came in the form of convertible notes, with the stipulation of a successful restructuring to give majority control to a for-profit arm. There is also a clause to remove the cap on returns for investors and a condition that prevents inventors from backing rival companies, such as Elon Musk’s xAI, as reported by the Financial Times.
2. Crypto markets rally, end the week on a high note
Bitcoin’s record-breaking September came to an abrupt end on Tuesday (October 1), with the cryptocurrency falling 6.8 percent to US$61,279.47 on Friday (October 4) morning from its peak of US$66,078. Ether, Solana, Cardano, XRP and Ton also experienced losses this week, and hefty outflows from spot exchange-traded funds were observed.
10x Research attributes Bitcoin’s initial drop on Monday to overbought conditions and apprehension surrounding Tuesday’s monthly US ISM Manufacturing data, a key economic indicator.
Further losses across the crypto market were fueled by rising tensions in the Middle East and the dockworkers strike along the east coast of the US. These events quickly dashed hopes of a bullish “Uptober,” a term used to describe a historically positive period for cryptocurrency prices in October.
Amid these volatile trading conditions, on Wednesday crypto asset manager Bitwise filed a Form S-1 with the SEC to launch an ETF for Ripple Labs’ XRP token. This move came as the SEC filed a notice to appeal Judge Analisa Torres’ August 7 ruling on Ripple Labs. The ruling states that Ripple Labs was in violation of securities law only when tokens were sold to institutional investors, and the judge ordered the company to pay a fine of US$125 million for improper selling — just over 6 percent of the US$2 billion the SEC was seeking.
In a statement, an SEC spokesperson said, "We believe that the district court decision in the Ripple matter conflicts with decades of Supreme Court precedent and securities laws and look forward to making our case to the Second Circuit."
Bitcoin's 24 hour price performance as of Friday at 4:00 p.m. PDT.
Chart via CoinGecko.
However, the tone shifted again on Friday afternoon as the US Department of Labor reported that the economy added 254,000 jobs in September, much higher than the expected 150,00. This provides a compelling rationale for the Federal Reserve to reduce interest rates gradually, which is good news for crypto markets. Bitcoin and Ether are up 2.3 percent and 3.4 percent, respectively, just after Friday's closing bell, marking the end of a turbulent first week of Q3.
3. California governor vetoes Senate Bill 1047
California Governor Gavin Newsom made a long-awaited decision regarding SB 1047, a comprehensive artificial intelligence policy that would have held developers responsible for “severe harm” caused by their technologies.
Describing the bill as “well-intentioned,” Newsom ultimately decided to veto the bill, authored by Senator Scott Weiner (CA-D). In a statement, the governor said the legislation would have applied “stringent standards to even the most basic functions” and that regulation should be based on “empirical evidence and science”. He also noted that a California-only approach to AI regulation could be warranted, “especially absent federal action by Congress."
However, SB 1047's focus on large, expensive AI models could mislead the public about the level of control over this rapidly evolving technology. It's possible that smaller, specialized models, not covered by the bill, could pose equal or greater risks, potentially stifling innovation that benefits the public.
The idea that overly stringent regulation would stifle progress and innovation in the field was the main argument made by opponents of the bill, which included former House Speaker Nancy Pelosi, Big Tech CEOs and venture capital firm Andreessen Horowitz, which has invested billions in AI.
4. AI startup Cerebras files for IPO
Cerebras Systems, an AI startup that builds specialized computer systems to facilitate deep learning, filed a registration statement for an initial public offering with the SEC on Monday. The company has experienced rapid growth and could one day challenge NVIDIA's dominance in the chip manufacturing industry in the US.
Cerebras' flagship product, the Wafer Scale Engine (WSE), is the largest chip ever made. Unlike traditional graphic processing units (GPUs), including NVIDIA's H100 GPU, which separate processing and memory, the WSE integration is designed to keep data on the chip rather than transferring it to different locations within a system or across a network.
The transfer of data creates what’s often called the Neumann bottleneck, a fundamental limitation that hinders performance by slowing down data access. Cerebras' architecture minimizes the distance data needs to travel, reducing latency and improving performance. This makes it an ideal solution for tasks that require massive data sets, such as genomic research, climate modeling, fraud detection and of course training large language models.
Recent filings show Cerebras' revenue surged nearly 70 percent in 2023 to US$78.7 million, compared to US$24.6 million the previous year. At the same time, losses narrowed from US$4.28 per share to US$2.92.
The company will list its Class A common stock on the Nasdaq under the symbol CBRS. The number of shares and the price range were not determined at press time.
5. Tesla stumbles after auto revenue declines
Shares of Tesla (NASDAQ:TSLA) are down 3.78 percent for the week following the company’s release of its Q3 results on Tuesday, which showed the company delivered 463,000 vehicles and produced approximately 470,000.
Tesla also reported a 2 percent increase in annual revenue to US$25.50 billion, topping LSEG estimates of US$24.77 billion. However, auto revenue fell by a whopping seven percent compared to a year ago, topping out at US$19.9 billion. Earnings per share also fell short of estimates, coming in at US$0.52 compared to US$0.62.
The company has had a rocky year, facing increased competition in China and regulatory scrutiny in the US. In July, sources for Bloomberg revealed that time constraints forced the company to delay the unveiling of its highly anticipated robotaxi from August 8 to October 10.
Tesla's performance, September 30 to October 4, 2024.
Chart courtesy of Google Finance
Following the report's release right after Tuesday’s closing bell, Tesla stock fell by over 4 percent in after-hours trading. Its share price slid a further 2 percent after the market’s opened on Wednesday before recovering to around US$250, roughly three percent lower than Monday’s opening price. Tesla closed the week at US$250.08.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
Tech 5: Micron Shares Spike on AI Demand, OpenAI Speculation Swirls
Stay informed on the latest developments in the tech world with the Investing News Network's round-up.
1. Strong US jobs data closes the week
The week began on a positive note as Wall Street’s major indexes opened slightly higher on Monday (September 23). The flash S&P Global Services Purchasing Managers' Index for September came in at 55.4, marginally ahead of the expected 55.2, reinforcing positive sentiment regarding the health of the economy.
However, Ladenburg Thalmann Asset Management CEO Phil Blancato cautioned that the market is anticipating more rate cuts that the US Federal Reserve is likely to deliver, which could lead to volatility in the coming weeks.
China announced aggressive stimulus measures to support its economy on Tuesday (September 24), including issuing special sovereign bonds worth about 2 trillion yuan, news that boosted stocks around the world.
The S&P/TSX Composite Index (INDEXTSI:OSPTX), S&P 500 (INDEXSP:.INX) and the Nasdaq Composite (INDEXNASDAQ:.IXIC) all set new closing records. Gains to chip stocks including Qualcomm (NASDAQ:QCOM) and Intel (NASDAQ:INTC) boosted the PHLX Semiconductor Sector (INDEXNASDAQ:SOX) by 1.23 percent.
Stocks traded flat on Wednesday (September 25) morning, with the Nasdaq Composite dropping by 0.13 percent after the opening bell. By midday, gains in major players NVIDIA (NASDAQ:NVDA), Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL) had reversed earlier losses for the tech-heavy index. It ultimately closed just 0.17 percent above its opening score, while the S&P 500 and S&P/TSX Composite Index both lost ground.
Thursday’s (September 26) weekly initial jobless claims data for the US shows 218,000 new claims compared to estimates of 225,000, signaling a strengthening in the labor market.
The tech sector was among the top gainers by midday, boosted by Micron’s upbeat forecast, which the company shared just after Wednesday’s closing bell. The S&P/TSX Composite Index logged a new record close above 24,000, its second this week. Meanwhile, gains to chips stocks boosted the PHLX Semiconductor Sector by 3.77 percent, while the S&P 500 hit an intraday record of 5,767.37 before retreating slightly to 5,745.37, still up by 0.4 percent. However, it was the Russell 2000 (INDEXRUSSELL:RUT) that led gains on Thursday, closing 0.62 percent ahead.
Friday's (September 27) Personal Consumption Expenditures Price Index report shows inflation rose slightly in August, leaving stocks largely unchanged. The S&P 500 ended the week down 0.13 percent, while the Nasdaq Composite and Nasdaq-100 (INDEXNASDAQ:NDX) were down 0.39 percent and 0.53 percent, respectively. Small-cap stocks outperformed again, with the Russell 2000 ahead by 0.67 percent at the closing bell.
2. Bitcoin breaks free from price lock
The digital asset market opened the week buoyed by the Fed's rate cut. While US$65,000 was seen as a key resistance level, favorable market conditions and historical price data were hinting at a potential breakout.
Bitcoin and Ether remained relatively stable on Tuesday and Wednesday, while altcoins saw modest gains. Their lack of movement as Asian stocks rallied suggests a stronger correlation with US economic data.
Meanwhile, Bitcoin exchange-traded funds (ETFs) maintained momentum for the second week in a row, attracting inflows of US$136 million on Wednesday, the largest in almost a month.
Ether's price dipped after the US Securities and Exchange Commission decided to delay its decision on whether to approve options trading for spot Ethereum ETFs until November 11. This choice came after the government body approved a similar product for BlackRock’s iShares Bitcoin Trust ETF (NASDAQ:IBIT) last week.
The crypto market performed strongly on Thursday, propelled by positive jobs data. Bitcoin surged, with its upward momentum continuing into Friday, when it passed US$65,000 to trade above US$66,000 for the first time since July. Ethereum performed similarly, hitting a weekly high of US$2,721 midday on Friday.
As of Friday afternoon, Bitcoin was up 1.6 percent over the past 24 hours, trading at US$65,836, while Ether was up 2.4 percent over the same period, reaching a level of US$2,697.
3. Micron delivers uplifting Q4 results
Micron reported results for its fourth fiscal quarter and full 2024 year on Wednesday, prompting an 18 percent increase in its share price on Thursday morning. As of Friday’s close, shares of Micron stood at US$107.47, reflecting a 16 percent increase for the week and a 9.82 percent gain for the month.
The company's revenue for Q4 reached US$7.75 billion, exceeding the US$6.81 billion reported in the previous quarter. Micron’s revenue for the same period last year was US$4.01 billion.
Revenue for the full year came in at US$25.11 billion, up from US$9.57 billion during the previous year.
“Micron delivered 93 percent year-over-year revenue growth in fiscal Q4, as robust AI demand drove a strong ramp of our data center DRAM products and our industry-leading high bandwidth memory. Our NAND revenue record was led by data center SSD sales, which exceeded US$1 billion in quarterly revenue for the first time,” said Micron President and CEO Sanjay Mehrotra in a statement shared by the company.
“We are entering fiscal 2025 with the best competitive positioning in Micron's history. We forecast record revenue in fiscal Q1 and a substantial revenue record with significantly improved profitability in fiscal 2025.”
Micron Technology performance, September 23 to 27, 2024.
Chart via Google Finance.
Guidance for the company's first fiscal quarter of 2025 outlines revenue of approximately US$8.7 billion, plus or minus US$200 million, indicating continued confidence in demand for semiconductor chips.
Micron's positive results also impacted other chip stocks last week.
Shares of NVIDIA were up 2.72 percent at Thursday’s bell, while Taiwan Semiconductor Manufacturing Company (NYSE:TSMC,TPE:2330) rose by 3.37 percent. Advanced Micro Devices (NASDAQ:AMD) and Qualcomm (NASDAQ:QCOM) saw their share prices rise by 3.22 percent and 4 percent, respectively.
4. Meta unveils new AI innovations at Connect event
Shares of Meta sank 0.44 percent this week following the Meta Connect event, held on Wednesday and Thursday.
The company showcased a lineup of new products, including a US$299 budget-friendly version of its Meta Quest 3 reality headset, the Quest 3S, which will replace its Quest 2 and Quest Pro models by the end of the year. It also revealed limited-edition Wayfarer Ray-Ban Meta smart glasses with live AI-powered reminders and translations.
In addition, Meta CEO Mark Zuckerberg unveiled upcoming AI features for Meta, such as tools that will create lip-synced translations of Reels and voice chat capabilities. The event also showcased Meta’s full holographic augmented reality glasses, Orion. This provided the first glimpse of a product that has been in development for years, though Zuckerberg stated that it's not yet ready for consumers and offered no release timeline.
Finally, Meta released the newest version of its language model, Llama 3.2, which includes small- and medium-sized versions designed to fit onto edge and mobile devices. Both versions can understand and process text and images, handling larger amounts of text while maintaining context over extended conversations or documents. It comes with improved multilingual support for eight languages: English, German, French, Italian, Portuguese, Hindi, Spanish and Thai.
Meta's share price fluctuated during the two day event, briefly rising 0.97 percent to US$575.40 before returning to its pre-event level, offering limited insight into investor sentiment.
5. OpenAI rumored to be restructuring
Speculation about the future of OpenAI intensified this week following a Thursday report from Reuters on the company’s alleged plans to restructure into a for-profit corporation. Experts see the anticipated move as an attempt to make the company, which is not publicly traded, a more attractive option for investors.
The news came just a day after Chief Technology Officer Mira Murati announced she will be departing from OpenAI, along with two other executives. Sources told Reuters that the non-profit will persist, but hold a minority stake.
The restructuring would also grant CEO Sam Altman his first equity stake in the company, potentially valued at US$150 billion if the plans materialize. No specific timeline for the restructuring was provided by the source.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
How to Invest in OpenAI's ChatGPT (Updated 2024)
“With the launch of ChatGPT late in 2022, the true scale of its disruptive potential was more realized across the world in 2023,” said Naseem Husain, senior vice president and exchange-traded fund (ETF) strategist at Horizons ETFs. “Its success has sparked a wave of generative and chat AI models, from Midjourney to Grok.”
Of course, OpenAI has also generated a lot of controversy, such as fears over job destruction and targeted disinformation campaigns. And let’s not forget the odd and abrupt, however brief, ousting of OpenAI CEO Sam Altman.
Many lawsuits have emerged as well. Multiple news outlets, including the the New York Times, have launched copyright lawsuits against OpenAI, and some of the plaintiffs are also seeking damages from the private tech firm’s very public partner Microsoft (NASDAQ:MSFT).
Additionally, the Authors Guild, which represents a group of prominent authors, launched a class-action lawsuit against OpenAI that is calling for a licensing system that would allow authors to opt out of having their books used to train AI, and would require AI companies to pay for the material they do use.
None of the controversy has curbed enthusiasm for investing in OpenAI, which, as of August 29, is reportedly on the verge of launching a new round of funding projected to bring its valuation to more than US$100 billion. Tech giants Apple (NASDAQ:AAPL) and NVIDIA (NASDAQ:NVDA) are rumored to want in on the round, as is its partner Microsoft.
In late September, Reuters reported that OpenAI is planning a restructuring that would see the non-profit become a for-profit company in order to make it "more attractive to investors." The non-profit OpenAI will still exist on its own and have a minority stake in the for-profit company. CEO Sam Altman will also receive an equity position in the new for-profit OpenAI.
With all of that said, there's still a lot of excitement surrounding generative AI technology. Many investors are wondering if it's possible to invest in ChatGPT stock, and if there are other ways to invest in generative AI. Here the Investing News Network (INN) answers those questions and more, shedding light on this new landscape.
What is OpenAI's ChatGPT?
Created by San Francisco-based tech lab OpenAI, ChatGPT is a generative AI software application that uses a machine learning technique called reinforcement learning from human feedback (RLHF) to emulate human-written conversations based on a large range of user prompts. This kind of software is better known as an AI chatbot.
ChatGPT learns language by training on texts gleaned from across the internet, including online encyclopedias, books, academic journals, news sites and blogs. Based on this training, the AI chatbot generates text by making predictions about which words (or tokens) can be strung together to produce the most suitable response.
More than a million people engaged with ChatGPT within the first week of its launch for free public testing on November 30, 2022. Many were in awe of the chatbot’s seemingly natural language capabilities, not only in terms of understanding questions, but also because of its human-like responses. Users felt as if they were having a conversation with a human.
Besides being an excellent conversation partner, ChatGPT can write engaging short stories, develop catchy marketing materials, solve complicated math problems, and even create code in various programming languages.
Based on this success, OpenAI created a more powerful version of the ChatGPT system called GPT-4, which was released in March 2023. This iteration of ChatGPT can accept visual inputs, is much more precise and can display a higher level of expertise in various subjects. Because of this, GPT-4 can describe images in vivid detail and ace standardized tests.
Unlike its predecessor, GPT-4 doesn't have any time limits on what information it can access; however, AI researcher and professor Dr. Oren Etzioni has said that the chatbot is still terrible at discussing the future and generating new ideas. It also hasn't lost its tendency to deliver incorrect information with too high a degree of confidence.
Further improving on its product, in May 2024 OpenAI launched Chat GPT-4o, with the o standing for omni. OpenAI describes GPT-4o as "a step towards much more natural human-computer interaction—it accepts as input any combination of text, audio, image, and video and generates any combination of text, audio, and image outputs."
This version has done away with the lagging response time afflicting GPT-4. This proves especially helpful for producing immediate translations during conversations between speakers of different languages. It also allows users to interrupt the chatbot to pose a new query to modify responses.
Why is Microsoft investing in OpenAI?
Ascannio / Shutterstock
Since 2019, Microsoft has invested at least US$3 billion in OpenAI to help the small tech firm create its ultra-powerful AI chatbot, as reported by New York Times technology correspondents Cade Metz and Karen Weise.
Microsoft announced in mid-January 2023 that as part of the third phase of its partnership with OpenAI, it will make "a multiyear, multibillion dollar investment." Although the company hasn't disclosed the total amount of its latest spend, reports at the time indicated that US$10 billion is on the table.
According to a February article from Reuters, OpenAI was valued at US$80 billion, meaning Microsoft's US$10 billion move would be huge. However, as of late 2023 there were rumors that OpenAI has only received a fraction of that purported investment.
As mentioned in the intro, Microsoft is reported to be interested in participating in OpenAI's rumored upcoming funding round as well.
How could Microsoft benefit from its investment? It seems the tech giant is hopeful advancements in generative AI may increase revenues for its Azure cloud computing business, as OpenAI officially licensed its technologies to Microsoft in 2020. Indeed, Pitchbook has described the deal as an “unprecedented milestone” for generative AI technology.
The strength of Microsoft’s confidence in OpenAI’s Altman was definitely on display in late November, when it quickly moved him to the payroll of its advanced AI research team after he was fired from OpenAI. Barely a week passed before Altman was back at the helm of OpenAI with major board changes, including the addition of Dee Templeton, Microsoft's vice president of technology and research partnerships and operations, as a non-voting observer.
What is Elon Musk's relationship to OpenAI?
DIA TV / Shutterstock
OpenAI was founded in 2015 by Altman, its current CEO, as well as Tesla's (NASDAQ:TSLA) Elon Musk and other big-name investors, such as venture capitalist Peter Thiel and LinkedIn co-founder Reid Hoffman. Musk left his position on OpenAI's board of directors in 2018 to focus on Tesla and its pursuit of autonomous vehicle technology.
A few days after ChatGPT became available for public testing, Musk took to X, formerly known as Twitter, to say, “ChatGPT is scary good. We are not far from dangerously strong AI.” That same day, he announced that X had shut the door on OpenAI’s access to its database so it could no longer use it for RLHF training.
His reason: “OpenAI was started as open-source & non-profit. Neither are still true.”
Furthering his feud with OpenAI, Musk filed a lawsuit against the company in March 2024 for an alleged breach of contract. The crux of his complaint was that OpenAI has broken the "founding agreement" made between the founders (Altman, Greg Brockman and himself) that the company would remain a non-profit. Altman and OpenAI have denied there was such an agreement and that Musk was keen on an eventual for-profit structure.
Musk dropped the lawsuit three months later without giving a reason, reported Reuters. The day before he dropped the lawsuit, he reacted to the news that Apple is partnering with OpenAI to incorporate ChatGPT with Apple devices. On X, Musk declared, "If Apple integrates OpenAI at the OS (operating system)level, then Apple devices will be banned at my companies. That is an unacceptable security violation.” It should be noted that OpenAI has said queries completed on Apple devices will not be stored by OpenAI.
Is ChatGPT revolutionary or hype?
Is ChatGPT a revolutionary technology or just another hyped-up tech fad that will flop, much in the way of Google Glass or the Segway? It may be too early to tell, but as with any new technology, there are plenty of wrinkles to iron out.
One of the most challenging bugs to fix before ChatGPT can be deployed more widely is the chatbot’s propensity to respond with “plausible-sounding but incorrect or nonsensical answers," admits OpenAI.
Remember, its selection of which words to string together are actually predictions — not as fallible as mere guesses, but still fallible. Even the 4.0 version is “still is not fully reliable (it “hallucinates” facts and makes reasoning errors),” says the company, which emphasizes that users should exercise caution when employing the technology.
Indeed, ChatGPT's failings can have dangerous real-life consequences. Among other negative applications, the tech can be used to spread misinformation, carry out phishing email scams or write malicious code. What’s more, the AI-based technology is prone to racial and gender-based biases. Not only has this language learning model contributed to the human-like quality of its responses, but it has also picked up on some of humanity’s shortcomings.
“ChatGPT was trained on the collective writing of humans across the world, past and present. This means that the same biases that exist in the data, can also appear in the model,” explains Garling Wu, staff writer for online technology publication MUO, in a September 2023 article. “In fact, users have shown how ChatGPT can give produce some terrible answers, some, for example, that discriminate against women. But that's just the tip of the iceberg; it can produce answers that are extremely harmful to a range of minority groups.”
On the flip side, an August 2023 study by the University of East Anglia identified a left-wing bias in ChatGPT. Researchers at the school said their work shows that ChatGPT "favors Democrats in the U.S., the Labour Party in the U.K., and president Lula da Silva of the Workers’ Party in Brazil," according to Forbes.
There’s also the fear among teachers that the technology is leading to an unwelcome rise in academic dishonesty, with students using ChatGPT to write essays or complete their science homework.
“Teachers and school administrators have been scrambling to catch students using the tool to cheat, and they are fretting about the havoc ChatGPT could wreak on their lesson plans,” writes New York Times tech columnist Kevin Roose.
Cybersecurity risks are also a concern for ChatGPT users, and recent events along these lines add validity to Musk's warning. For one, ChatGPT for macOS was discovered to be breaching Apple's security rules by storing data as plain text rather than encryption, making it possible for other apps to access.
What's the future of OpenAI and ChatGPT?
The ChatGPT 3.5 platform is free to use, and can be accessed via the web. Those with an iPhone or iPad can also use ChatGPT through an app, and an Android version launched in July 2023. OpenAI also launched a paid subscription, ChatGPT Plus for business use, in August 2023. ChatGPT Plus gives users access to GPT-4, and the newest iteration GPT-4o.
In addition to Microsoft's use of the ChatGPT technology as part of Copilot, other companies are working with OpenAI to incorporate the technology into their platforms, including Canva, Duolingo (NASDAQ:DUOL), Intercom, Salesforce (NYSE:CRM), Scale, Stripe, and Upwork (NASDAQ:UPWK).
As uptake increases, generative AI technology is replacing humans in the workplace, and will likely continue doing so in a number of fields, from content creation and customer service to transcription and translation services, and even in graphic design and paralegal fields. However, humans are hitting back, as evidenced by recent lawsuits launched against OpenAI and Microsoft. As mentioned, a growing group of prominent authors is suing the creator of ChatGPT and its financial backer for infringing on their copyright by using their books without permission to train the language models behind ChatGPT and other AI-based software.
The New York Times has also taken a stand by taking OpenAI and Microsoft to Manhattan Federal Court.
"Defendants seek to free-ride on the Times's massive investment in its journalism by using it to build substitutive products without permission or payment," states the complaint. "There is nothing 'transformative' about using the Times's content without payment to create products that substitute for the Times and steal audiences away from it."
Scarlett Johansson has also entered the ChatGPT legal minefield after she discovered OpenAI using what she claims is her voice for its chatbot personal assistance voice, Sky. CEO Sam Altman, however, has denied using her voice without permission.
“The voice of Sky is not Scarlett Johansson's, and it was never intended to resemble hers. We cast the voice actor behind Sky’s voice before any outreach to Ms. Johansson,” Altman said in a May 20, 2024 statement. “Out of respect for Ms. Johansson, we have paused using Sky’s voice in our products. We are sorry to Ms. Johansson that we didn’t communicate better.”
What about the long-term goals for OpenAI and ChatGPT? Metz of the New York Times believes the end game is “artificial general intelligence, or AGI — a machine that can do anything the human brain can do.”
In keeping with this end goal, OpenAI made a major move by acquiring an AI creative firm with a deep talent bench, Global Illumination, in mid-August 2023. "Global Illumination is a company that has been leveraging AI to build creative tools, infrastructure, and digital experiences," states OpenAI on its website.
"The team previously designed and built products early on at Instagram and Facebook and have also made significant contributions at YouTube, Google, Pixar, Riot Games, and other notable companies."
In November 2023, OpenAI decided to give customers without coding skills the ability to create customized versions of its chatbot and access to large data sets for training. “OpenAI wants people to start innovating using the chatbots and creating special chatbots,” Hod Lipson, an engineering and data science professor at Columbia University, told CNBC.
Chatbot creators will eventually have the ability to share their custom chatbots through OpenAI’s GPT Store. “They’re really trying to create a marketplace, which will allow companies and people to innovate and play around with this incredible form of AI that they’ve just unleashed,” Lipson added.
What is Google's Gemini?
While ChatGPT has been generating major buzz, it's definitely not the only chatbot out there.
Notably, Alphabet (NASDAQ:GOOGL) subsidiary Google launched its answer to ChatGPT in March 2023. Originally known as Bard AI, the chatbot is built on Google’s Language Model for Dialogue Applications (or LaMDA). Google CEO Sundar Pichai has described Bard as an “experimental conversational AI service … (that) seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models.”
As with ChatGPT, users can key in a query, request or prompt and it will provide a human-like response. One way in which Google's chatbot may have had a leg up on the original ChatGPT is that the latter could only use data up to 2021, while the former can access up-to-date information online; this is less relevant now that GPT-4 no longer has this limitation.
However, this ability to access current data hasn’t spared it from ChatGPT’s biggest folly: confidently stating misinformation as fact. The Verge reported that when asked about new discoveries from the James Webb Space Telescope, Google’s chatbot “made a factual error in its very first demo.”
In early in 2024, Google launched the latest iteration of its Bard Advanced AI chatbot with a new name, Gemini AI. The new version is powered by Google's Gemini Ultra large language model.
Which stocks will benefit the most from AI chatbot technology?
While most companies specializing in generative AI remain in the venture capital stage, there are plenty of AI stocks for those interested in the space. INN's article 5 Canadian Artificial Intelligence Stocks, ASX AI Stocks: 5 Biggest Companies, and 12 Generative AI Stocks to Watch as ChatGPT Soars includes some examples.
Other than companies directly tied to generative AI technology, which stocks are likely to get a boost from advances?
There are several verticals in the tech industry with indirect exposure to AI chatbot technology, such as semiconductors, network equipment providers, cloud providers, central processing unit manufacturers and internet of things.
Some of the publicly traded companies in these verticals include:
- Graphics processing unit leader Nvidia
- The world's largest semiconductor chip manufacturer by revenue, Taiwan Semiconductor Manufacturing Company (NYSE:TSM)
- Computer memory and data storage producer Micron Technology (NASDAQ:MU)
- Digital communications firm Cisco Systems (NASDAQ:CSCO)
- Networking products provider Juniper Networks (NYSE:JNPR)
- Semiconductor producer Marvell Technology Group (NASDAQ:MRVL)
- Cloud-computing Amazon Web Services' parent company Amazon (NASDAQ:AMZN)
- Bluechip multinational technology company IBM (NYSE:IBM)
- Major semiconductor chip manufacturer Intel (NASDAQ:INTC)
Investors who don’t like to put all their eggs in one basket can check out these 5 Artificial Intelligence ETFs. And if you’re looking for a more general overview of the market, INN has you covered with How to Invest in Artificial Intelligence. You can also take a look back at the market in 2023 with our AI Market 2023 Year-End Review, or read projections for AI this year in our AI Market Forecast: 3 Top Trends that will Affect AI in 2024. Generative AI is also a major theme in the Top 10 Emerging Technologies to Watch in 2024.
FAQs for investing in OpenAI and ChatGPT
When will OpenAI go public?
OpenAI stock is not currently publicly traded, but following the recent move to restructure the company from a non-profit to a for-profit entity, Forbes reports that an initial public offering (IPO) may be in the works for 2025. For now, investors can gain exposure through related tech companies discussed here.
For example, if Microsoft does take a large position in the company, investors will be able to gain indirect exposure to OpenAI by purchasing Microsoft shares. For those seeking direct exposure, be on the lookout for news of an upcoming IPO.
How is OpenAI funded?
OpenAI raised US$11.7 billion over seven funding rounds from 2016 to April 2024.
Top investors include technology investment firm Thrive Capital, venture capital firm Andreessen Horowitz and revolutionary technology investment firm Founders Fund.
As reported above, OpenAI may soon initiate a new round of funding worth a projected US$100 billion, with potential participation by Apple and NVIDIA.
What is the market value of ChatGPT/OpenAI?
OpenAI has a market valuation of US$80 billion as of February 2024. The company’s 2023 revenue had reached US$2 billion mark in December 2023 to join the ranks of Google and Meta (NASDAQ:META). OpenAi's annualized revenue reached US$3.4 billion in May 2024.
Following the planned restructuring from a non-profit to a for-profit company, OpenAI's valuation is projected to increase to US$150 billion.
Does ChatGPT use Nvidia chips?
ChatGPT’s distributed computing infrastructure depends upon powerful servers with multiple graphics processing units (GPUs). High-performance Nvidia GPU chips are preferred for this application as they also provide excellent Compute Unified Device Architecture support.
Will ChatGPT cause another GPU shortage?
ChatGPT and generative AI will most likely not cause a GPU shortage. The type of GPUs used for machine learning models like ChatGPT are different from other types of GPUs, including those used to power gaming systems or crypto mining.
Can ChatGPT make stock predictions?
A University of Florida study recently highlighted the potential for advanced language models such as ChatGPT to accurately predict movements in the stock market using sentiment analysis.
During the course of the study, ChatGPT outperformed traditional sentiment analysis methods, and the finance professors conducting the research concluded that “incorporating advanced language models into the investment decision-making process can yield more accurate predictions and enhance the performance of quantitative trading strategies.”
When to expect ChatGPT 5?
OpenAI filed a trademark application for ChatGPT-5 in mid-July 2023, which hinted that the next iteration of the generative AI technology is currently under development. There were rumors the company planned to complete training for ChatGPT-5 by the end of 2023, but this did not materialize.
PC Guide noted in April 2024 that Sam Altman had teased an “amazing new model this year" in a March 2024 interview on the Lex Fridman podcast. More recently, tech writer Suswati Basu shared that OpenAI confirmed in a May 28 blog that a new model is in the works, and she predicts an expected release in late 2024 or early 2025.
This is an updated version of an article first published by the Investing News Network in 2023.
Don't forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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