How ChatGPT Caused ‘Gold Rush’ in Silicon Valley

San Francisco:

ChatGPT, Silicon Valley’s latest app sensation, has investors scrambling to find the next big thing in generative AI, the technology that some say is the start of a new era in big tech.

Artificial intelligence (AI) has been increasingly present in everyday life for decades, but the November launch of the conversational robot from start-up OpenAI marked a turning point in the perception of it by the general public and investors.

“Occasionally we have platforms that come along and result in an explosion of new businesses. We saw this with the web and mobile, and AI could be the next platform.” said Shernaz Daver of California-based Khosla Ventures.

Generative AI, of which ChatGPT is an example, wades through oceans of data to conjure up original content in seconds and on simple request – an image, a poem, a thousand-word essay.

Since its discreet release in late November, ChatGPT has become one of the fastest-growing apps ever, prompting Microsoft and Google to rush projects that had until now been carefully guarded over fears that the technology wasn’t ready for the public.

“Just five days after its release, a million people were using ChatGPT — about 60 times faster than it took Facebook to reach a million users,” says Wayne Hu, a partner at SignalFire, another venture capital firm.

“Suddenly, investors are all talking about how ChatGPT can eliminate millions of knowledge worker jobs, disrupt trillion-dollar industries, and fundamentally change the way we learn, consume and make decisions,” he said.

The explosion of generative AI comes at an otherwise bleak time for the technology sector, with tens of thousands laid off at the world’s largest companies and smaller companies struggling to survive.

“While other categories are downsizing valuations and raising capital, generative AI companies are not,” said Daver.

Hu said market valuations for generative AI companies are sky-high, while they’ve contracted for everything else.

– ‘Difficult to keep up with’ –

OpenAI, the maker of ChatGPT, is valued at nearly $30 billion by Microsoft, despite the fact that money continues to be wasted at a rapid rate, he said.

Entrepreneurs who specialize in generative AI say they no longer need to scream for attention when chasing money or going through the details of what they’re trying to offer.

“It helped us a lot,” says Sarah Nagy, founder of Seek AI, a start-up that allows non-specialists to extract technical data from a database using queries in everyday language.

“Before ChatGPT…I had to explain what generative AI is and why it matters,” she added.

Now the hunger for ChatGPT-like possibilities is seemingly limitless, and not just from investors.

“Customer demand has skyrocketed,” says Nagy. “It’s even hard to keep up, because we’re still a small company.”

The entrepreneur wants to grow her team and, according to Daver, while the trend is to downsize, “we’re currently recruiting people” in generative AI.

In recent weeks, it is mainly the giants that are in the news, first and foremost Microsoft, OpenAI’s partner and investor, followed by Google, which tries to keep up.

But in their shadow, a galaxy of start-ups also has ideas to offer.

Other recent examples of funding rounds include California-based Kognitos, which aims to automate administrative tasks, and the designer platform Poly, which can create 3D graphics or maps in seconds.

In addition to the usual venture capitalists, tech giants are also on the lookout, such as Google, which just invested $300 million to acquire 10 percent of newcomer Anthropic and its chatbot Claude.

Hu said ChatGPT’s “gold rush” could be unprecedented and could go far beyond generative AI because the very technology itself minimizes the need for a computer coder or designer to execute ideas.

“Now you no longer need to get a Stanford PhD in computer science: any developer can build something amazing on top of ChatGPT and other basic models in one weekend.”

“This wave of AI could be bigger than mobile or the cloud, and more on the scale of something like the industrial revolution that changed the course of human history,” Hu said.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)