2 years ago ChatGPT triggered an AI boom — it may still just be getting started

The launch of ChatGPT by OpenAI in November 2022 marked a pivotal moment in artificial intelligence development, triggering widespread adoption, significant investment, and broader discussions about AI’s role in society.

Market Impact and Growth: The artificial intelligence sector has experienced unprecedented expansion since ChatGPT’s debut, reshaping the technology industry’s economic landscape.

• OpenAI’s valuation has soared to $157 billion, with ChatGPT attracting 200 million weekly active users as of August 2023
• AI-related startups now comprise 35% of all venture capital-funded companies in 2023
• The six major tech companies (Google, Amazon, Apple, Meta, Microsoft, and Nvidia) have added $8 trillion in combined market value since 2022
• UBS projects the AI industry’s value will grow from $28 billion in 2022 to $420 billion by 2027

Financial Dynamics: Despite impressive revenue growth, the economics of AI development present complex challenges.

• OpenAI achieved a monthly revenue of $300 million in August, marking a 1,700% increase from early 2023
• The company continues to operate at a loss, spending more than it earns
• Nvidia has emerged as one of the world’s three most valuable companies by market capitalization
• The company’s CEO compared ChatGPT’s impact to the iPhone’s transformative effect on mobile technology

Regulatory Landscape: The rapid advancement of AI has prompted varying approaches to oversight and control.

• President Biden implemented an executive order in 2023 establishing AI safety and security standards
• President-elect Trump’s stance on AI regulation remains uncertain, with suggestions of potentially repealing Biden’s executive order
• Elon Musk’s influence, including his reported role in selecting an “AI czar,” may shape future regulatory directions

Technical Evolution: The future of AI development may require fundamental shifts beyond current technological approaches.

• Industry experts suggest AI needs to advance beyond large language models
• The concept of “large world models” that can both see and understand how the world works represents a potential next frontier
• Current AI systems face challenges with data scarcity and high computing costs
• Some industry leaders acknowledge their technology may be reaching a plateau

Future Considerations: The trajectory of AI development suggests both opportunities and challenges ahead, while early fears about job displacement and apocalyptic scenarios have largely not materialized.

• The industry faces increasing scrutiny over energy consumption and environmental impact
• Technical limitations and data availability may necessitate new approaches to advance the field
• The search for breakthroughs beyond current model architectures continues, though the timeline for significant advances remains uncertain