How ChatGPT Started the Gold Rush in Silicon Valley

How ChatGPT Started the ‘Gold Rush’ in Silicon Valley

How ChatGPT Started the Silicon Valley Gold Rush

ChatGPT has grown into one of the fastest growing apps of all time.

San Francisco:

ChatGPT, Silicon Valley’s latest app sensation, has investors rushing to find the next big thing in generative AI, the technology some are hailing as the dawn of a new era in big tech.

Artificial intelligence (AI) has been a growing part of everyday life for decades, but the launch of startup OpenAI’s conversational robot in November marked a turning point in its perception by the general public and investors.

“Every now and then we have platforms that emerge and lead to an explosion of new businesses. We’ve seen this with the web and mobile, and AI could be the next platform,” said Shernaz Daver of Khosla Ventures in California.

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

Since its discreet release in late November, ChatGPT has grown into one of the fastest-growing apps of all time, pushing Microsoft and Google to accelerate projects that have been carefully guarded over fears that the technology isn’t ready for the public .

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

“Suddenly all investors are talking about how ChatGPT could 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 surly time for the tech sector, with tens of thousands of layoffs sweeping through the world’s largest companies as well as smaller companies struggling to survive.

“While other categories are facing declines in valuations and fundraising, generative AI companies are not,” Daver said.

Hu said that market valuations for generative AI companies have skyrocketed while everything else has declined.

– “Hard to Hold” –

OpenAI, the creator of ChatGPT, is valued by Microsoft at nearly $30 billion, though it’s still burning money at a fast pace, he said.

Entrepreneurs specializing in generative AI say they no longer need to scream for attention or go through the details of their offering when looking for cash.

“It helped us a lot,” said Sarah Nagy, founder of Seek AI, a start-up that enables non-experts 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’s important,” she added.

Now the appetite for ChatGPT-like features seems to have no limit, and not just from investors.

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

The entrepreneur is looking to grow her team, and according to Daver, while the trend is downsizing, “we’re currently hiring” in generative AI.

In the past few weeks it has been the giants that have been in the news, most notably Microsoft, partner and investor in OpenAI, followed by Google trying to keep up.

But in its shadow, a galaxy of startups has ideas to offer as well.

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

In addition to the usual venture capitalists, tech giants are 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 expand far beyond generative AI, as the technology itself minimizes the need for a computer coder or designer to implement ideas.

“Now you don’t need a Ph.D. in computer science anymore: any developer can build something amazing on top of ChatGPT and other foundational models in a weekend.”

“This AI wave 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 was not edited by NDTV staff and is auto-generated from a syndicated feed.)

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