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- Companies are starting to capitalize on the investor frenzy around artificial intelligence.
- The release of ChatGPT in November has supercharged investor interest in the space, sending some stocks soaring.
- Even companies with no existing business in AI have seen shares surge on news related to trend.
Investors love a good viral trend to sink their teeth into, and that's on full display right now amid the buyside's frenzy for anything related to artificial intelligence, be it a struggling media company or a tiny software firm.
Ever since OpenAI released ChatGPT in November, investors have been growing more and more interested in the potential for artificial intelligence to reshape whole industries (not to mention draw massive amounts of capital).
ChatGPT is a natural language chatbot that allows users to have human-like conversations on a myriad of topics. Just two months after its release, users of ChatGPT are using the platform to assist with writing emails, developing code, and answering questions on topics ranging from dating to investing.
As is often the natural course of these trends, ChatGPT and AI have fully captured Wall Street's attention, and companies are starting to cash in.
C3.ai said in a press release on Tuesday that it would incorporate ChatGPT into its enterprise product offerings. The stock soared 22%, and is up another 9% today. While C3.ai has always been focused on artificial intelligence, the announcement on Tuesday and subsequent pop in the shares showed that investors are hungry for anything new and shiny in this space.
Buzzfeed is another example. The digital media company known for its viral quizzes and listicles said it would harness ChatGPT to create personalized content for its readers, and like clockwork its stock quadrupled over a two-day period. The stock has since dropped 48% from its recent peak.
Even some more obscure and only vaguely AI-adjacent names are getting a boost from the hype. On Wednesday, Versus Systems, a small software firm with a roughly $7 million market cap, saw its stock spike 400% on an announcement it's partnering with a company that has some focus on AI, even though Versus itself has no discernible business in the space.
Just as the 1960s saw a wave of companies scrambling to associate themselves with consumer electronics by adding "tron" the end of their name, the 1990s experienced a wave of .com branding, and the mid 2010s were awash in blockchain businesses (remember Long Island Blockchain?), the world in 2023 is witnessing a new gold rush to the wild west of AI.
The metaverse is another great example of markets jumping the shark on a nascent trend. Last year, investors scrambled for anything related to Web3, only to have their dreams of virtual economies rudely interrupted by developments in the real economy. Metaverse ambitions mostly flamed out as financial conditions tightened and the sector was rocked by high-profile crypto scandals.
Now, sparked by the promising (and, to be fair, real) capabilities of ChatGPT, artificial intelligence is the market's shiny new object.
There's little doubt that artificial intelligence will be a game-changer in the coming years, and there will be plenty of winners in the space, but similar to recent crazes like last year's rush to the metaverse, investors at this point may still want to take the grandiose promises of AI with a large grain of salt.
from Business Insider https://ift.tt/KxGs64t
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