ChatGPT, which has become popular recently, detailed explanation
"A 'perfect storm' targeting AI is forming," describes an industry investor.
ChatGPT, a product that has gained significant attention, is being discussed on every street and corner. Stocks related to ChatGPT soared, and even a big data company's founder mentioned receiving inquiries about integrating ChatGPT into their products.
After the AI industry experienced a lull following Google's AlphaGo defeating Lee Sedol in 2016, AI algorithm companies from the previous wave struggled in the hardware and data quagmire. For many years, the AI industry has been in dire need of a phenomenon like this. The emergence of ChatGPT has brought the industry back into the public eye, this time with Microsoft's OpenAI leading the way instead of Google.
The wind is blowing too fast.
On January 17th, Microsoft CEO Satya Nadella publicly announced the integration of OpenAI's products into Microsoft's ecosystem, including Bing, Office, GitHub, and Azure. In the following week, Microsoft announced billions of dollars in additional investments in OpenAI. Recently, OpenAI unveiled the latest subscription-based business model for ChatGPT.
In the early morning of February 7th (Beijing time), Google unexpectedly released Bard, the next-generation conversational AI system based on Google's LaMDA model. On the same day, Baidu also announced the development of its Ernie Bot project, which is planned to be available for public use in March.
In the early morning of February 8th (February 7th local time in the United States), Microsoft announced the launch of the latest version of the Bing search engine and Edge browser supported by ChatGPT. Satya Nadella stated that "a new era has come for search engines." Microsoft claims that Bing is built on a new generation of large language models that are more powerful than ChatGPT and can intelligently connect with OpenAI's technology using web knowledge.
Within 24 hours, three tech giants made their moves, racing to occupy the high ground. This wind is not only fast but also fierce.
"Google may be completely disrupted in just one or two years," said Paul Buchheit, one of Gmail's creators and a former Google employee. He stated that ChatGPT will completely destroy Google's search engine, which is vital to its existence.
ChatGPT is a large-scale AI conversation model released by OpenAI at the end of November 2022. Within a month of its launch, ChatGPT raised OpenAI's valuation from $20 billion to $29 billion. If its commercialization progresses on a large scale, it may be hard for future generations to imagine a time when humans had to conceive copy or write program code themselves. It is similar to how we can hardly imagine computers that used to occupy an entire room.
As a capped-profit company, OpenAI's research in the AI field is not solely driven by profit. However, ChatGPT seems to be pushing OpenAI towards profitability. According to The Information, OpenAI plans to achieve $200 million in revenue in 2023 and $1 billion by the end of 2024.
In a 2022 analysis article titled "Generative AI: A Creative New World," investment firm Sequoia Capital USA mentioned that generative AI has the potential to create trillions of dollars in economic value. Today, as one of the representative products in the AI generative content (AIGC) field, ChatGPT's explosion is confirming this prediction.
"A combination of underlying technological accumulation and market maturity led to ChatGPT," summarized an industry investor's understanding of this phenomenon. He compared ChatGPT to the iPhone, not the first smartphone but the most successful one.
Just like how the iPhone gave rise to a series of smartphone apps, numerous application-oriented companies are rapidly growing based on GPT and other generative AI models. In the past year, the AIGC track has been creating unicorns. However, behind these wealth creation stories, an increasing number of people seem to realize that only a few stories can be sustained, while many may not last long.
Through interactions with multiple investors and industry insiders, Hu Xiu attempts to clarify the commercial models currently existing in the AIGC field, distinguishing which ones can succeed and which ones are unsustainable.
AIGC Bubble: Bursting Before It Fully Inflates
AIGC (AI Generative Content) is a form of AI technology that directly produces content. Generative AI is not a new concept, but 2022 was considered the "first year" of AIGC by many in the AI industry. Two significant events marked the beginning of this "first year." One was the phenomenal success of ChatGPT, which elevated people's understanding of the capabilities of AI. The other was the open-source release of Stable Diffusion, an image-generating large model, in August 2022. Although Stable Diffusion is not a very powerful AIGC model, its open-source nature made image generation accessible to the general public and contributed to the explosive popularity of AIGC.
Stable Diffusion is a diffusion model for generating images developed jointly by AI companies Stability AI and Runway. Compared to previous generative adversarial networks (GANs), diffusion models generate images faster and with better quality.
With AI-generated art gaining popularity on social media, creative netizens on platforms like Douyin and Xiaohongshu even proposed hanging AI-generated images in paid galleries as a source of "passive income." AIGC image generation quickly became an accessible business opportunity.
Among these AIGC companies, several unicorns have emerged. They include Jasper, which utilizes OpenAI's large models for commercialization, and Stability AI, one of the developers behind Stable Diffusion.
Company Product or Technology Valuation (USD) Founding Year OpenAI ChatGPT, DALL-E $29 billion 2015 Anthropic Claude $5 billion 2021 JasperAI Content Generation Platform $1.5 billion 2021 Inflection AI Human-Machine Interaction $1.23 billion 2022 Character.AI Chatbot $1 billion 2021 Adept AI Labs Human-Machine Interaction $1 billion 2021 Stability AI Stable Diffusion $1 billion 2019
Overseas AIGC Unicorns (Ranked by Valuation)
OpenAI, with its years of experience in developing large models like GPT and DALL-E, stands out among the rest. Although the valuations of other unicorns are far from reaching OpenAI's, they have all experienced significant increases in valuation within a short period. Jasper, for example, is merely a service provider based on OpenAI's technology but has reached a valuation of $1.5 billion. Anthropic, with its claim of "ChatGPT's strongest competitor," caught Google's attention in its time of crisis and approached a valuation of $5 billion.
According to third-party research firm PitchBook, overseas investors invested at least $1.37 billion in the AIGC sector in 2022, completing 78 transactions, equivalent to the total investment of the previous five years.
