(BFM Bourse) – The craze around the Open AI conversational robot has created a fashion effect that has not left investors indifferent. But like any frenzy, there are risks.
The ChatGPT phenomenon does not only create buzz on social networks. The Open AI conversational robot in which Microsoft has invested billions of dollars has also caused a real stir on the stock market, as has been very well spotted by several media including The echoes And Agefi.
Not a day seems to go by without a group announcing a new initiative to integrate artificial intelligence into its model. Sometimes with significant success on the stock market. Chinese e-commerce giant Alibaba saw its share price soar 4% in Hong Kong on Thursday after the company said it was working on setting up a competitor to ChatGPT saying it is conducting internal testing in this market. optical. Without giving the slightest timetable on this tool.
It is not the only Chinese company to have benefited from the wave. Baidu, another Chinese e-commerce behemoth, jumped 15% on Tuesday after announcing plans to deploy ‘Ernie Bot’, another chatbot, whose development is due to begin in September.
Beyond conversational robots, artificial intelligence specialists have been highly sought after on the stock market. Deep Glint and Hawang Technology, Chinese specialists in the field, have seen their prices jump 67.6% and 130% since the start of the year, as investors seek companies similar to OpenAI, reports Forbes.
A trillion dollar market?
Same case in the United States. Soundhound, a company specializing in voice artificial intelligence, has jumped 144% since the start of the year. C3.ai, which designs software in this area, gains 112%. For Bigbear.AI, a company specializing in AI analysis that recently won a major contract with the US Air Force, the take-off amounts to…. 650%. Note also Buzzfeed, the media specializing in articles, which has jumped 140% since January 1, while it recently indicated that it is working with ChatGPT to develop content.
“With an announced growth of more than 20% for the global market in 2022, artificial intelligence is a sector that seems to have good years ahead of it. Recent innovations in the field have effectively shown that the development of artificial intelligence is not about to stop”, underlined John Plassard, of Mirabaud, in a note published at the end of January.
UBS has estimated that the total addressable market for generative AI could be $1 trillion. “It may seem like a crazy bullish scenario and prices could fall, but what we mean is that the market has the potential to be extremely large,” the bank explained in a recent note.
Microsoft ready to cut croupiers to Google
To return to ChatGPT, Microsoft saw its share price rise by 4% on Tuesday after announcing that an improved version of the chatbot would integrate Bing, its search engine, thereby threatening the hegemony of Google (Alphabet).
The conference dedicated to AI by the group co-founded by Bill Gates also attracted many design offices. “With these exciting new features coming to users of its Bing search engine, Microsoft’s artificial intelligence strategy has the potential to transform the Internet search market by translating into market share gains. of market thanks to increased benefits for users and an improved experience”, explains Wedbush, quoted by CercleFinance.
“We view ChatGPT’s prowess and rise to consumer prominence as a near-term threat to Alphabet’s trading multiples and a boost to [ceux de] Microsoft and Nvidia [le fabricant de cartes à puces dont les technologies peuvent être utilisées dans l’IA, NDLR]“, advance UBS
“Search improvements will act as a buoyant wind for ad revenue in the long run, but it will take time to bring users back to Bing ‘and they’ll need to get their feet wet’ to steer advertisers away from Google “, believes for his part Jefferies, quoted by Markets Insider.
For the moment Google has hardly convinced the market, after unveiling its own conversational robot, Bard, on Wednesday. The group left investors on their hunger after a presentation where the group did not give great details on how it plans to integrate Bard into its search engine, nor give a deadline. To make matters worse, Bard made a mistake by giving erroneous information on the scientific discoveries made possible by the James Webb Space Telescope. Alphabet stock was down nearly 8% on Wednesday night.
More than a fashion
For Morgan Stanley, this frenzy is reminiscent of past “fashions”, which may have shaken the markets, such as the “meme stock” (values prized by stock marketers on social networks) or companies specializing in cannabis.
“Generative AI, now popularized by ChatGPT, has all the hallmarks of hype: a social media sounding board, exponential venture capital funding and polarized media,” the US bank points out. “Yet something suggests that the AI hype is worth serious consideration… After all, ChatGPT is the fastest platform to hit 1 million users and 100 million views for a Therefore, when we consider the diffusion of technologies that can have real potential for impact on the market, generative AI represents a strong contender,” adds Morgan Stanley, noting that investors seem to share his point of view.
However, limits and risks remain. The reliability of information, as demonstrated by Bard, remains a pitfall. “Accuracy remains ChatGPT’s Achilles’ heel,” Morgan Stanley points out.
As Bloomberg reports, investors may, beyond the stock market frenzy, have questions on this point. The agency explains that several Chinese AI companies fell sharply on the stock market on Thursday after a local media advised holders not to blindly follow the trend, because these technologies will take time to prove their worth. Some of these securities have been investigated by the Chinese authorities.
“The technology will be ready one day, but we often tend to underestimate the time needed to bring projects to fruition,” warns Jacques-Aurélien Marcireau of Edmond de Rothschild AM, quoted by The echoes. In addition, “ChatGPT’s economic model is still very far from the new profitability requirements of investors”, adds the manager, referring to the more complicated context for tech on the stock market.
Julien Marion – ©2023 BFM Bourse