Here are the takeaways from today’s Morning Brief, which you can register to receive every morning in your mailbox accompanied by:
The third anniversary of ChatGPT’s release will be on Sunday.
For investors and the business world, well over three years of change followed.
Stock prices soared. Workflows have changed. Staffing requirements have been radically changed. Massive construction of national infrastructure is underway.
The economy has become increasingly K-shaped, with the distance widening between the haves and the have-nots, both in the business and consumer arenas.
The transformed state of the economy and markets is remarkable in itself. But in the context of the markets from which this artificial intelligence boom arose, the turnaround is even more impressive.
Simply put, ChatGPT not only catalyzed the biggest tech boom in a generation; it offered a catalyst to turn around one of the worst market environments investors have faced since the financial crisis.
On October 12, 2022, the S&P 500 Index reached its lowest point in the post-COVID sell-off, falling 25% from its record high on the first trading day of the year.
By the time OpenAI released ChatGPT on November 30, 2022, the S&P 500 had rebounded nearly 13% from its lows, but the index still wouldn’t hit a new record high until January 2024.
In the fall of 2022, inflation was raging and the Federal Reserve aggressively raise rates in an effort to finally catch up. Technology stocks, which had been the darlings of the market coming out of the pandemic, were at the center of the market storm.
At their lowest level since the start of the year, shares of future AI winners like Nvidia (NVDA), Meta (META), and Palantir (PLTR) are down almost 70% in 2022. Apple (AAPL) shares are down almost 30% in 2022. Alphabet (GOOG, GOOGL) shares are down almost 40%. Shares of Amazon (AMZN) were cut in half.
And it is in this context that the doubt which seems to be driving this bullish run becomes more explainable.
OpenAI’s announcement unveiling ChatGPT in November 2022 was six long sentences.
Eighteen months before its ChatGPT release, OpenAI was valued at $14 billion during its last fundraising; today, the private company is worth 500 billion dollars. Fewer than 20 companies in the world are worth more.
“We trained a model called ChatGPT that interacts in a conversational way,” OpenAI said in its announcement. “The dialogue format allows ChatGPT to answer follow-up questions, admit mistakes, challenge incorrect premises, and reject inappropriate requests. … We are excited to introduce ChatGPT to get user feedback and learn about its strengths and weaknesses.”
