ChatGPT has become one of the fastest growing apps ever since its secret release in late November, prompting Microsoft and Google to rush out projects that had previously been kept under wraps due to concerns that the technology was not yet ready for public consumption.

Generative AI, such as ChatGPT, sifts through mountains of data to generate unique content – an image, a poem, a thousand-word essay – in seconds and in response to a simple request.

ChatGPT, Silicon Valley’s newest app sensation, has investors scrambling to find the next big thing in generative AI, the technology that some hail as heralding the start of a new era in big tech.

Artificial intelligence (AI) has been increasingly present in everyday life for decades, but the November launch of the conversational robot from start-up OpenAI marked a watershed moment in the public and investor perception of AI.

“Every now and then, a platform emerges that results in an explosion of new businesses. This was evident with the internet and mobile, and AI may be the next platform.” said Shernaz Daver of Khosla Ventures in California.

Generative AI, of which ChatGPT is an example, sifts through massive amounts of data to generate unique content – an image, a poem, a thousand-word essay – in seconds and in response to a simple request.

ChatGPT has become one of the fastest growing apps ever since its secret release in late November, prompting Microsoft and Google to rush out projects that had previously been kept under wraps due to concerns that the technology was not yet ready for public consumption.

“A million people used ChatGPT just five days after its release – about 60 times faster than Facebook took to reach one million users,” said Wayne Hu, a partner at SignalFire, another venture capital firm.

“All of a sudden, investors are discussing 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 rise of generative AI comes at a particularly bleak time for the tech industry, with tens of thousands of layoffs sweeping through the world’s largest corporations as well as smaller ones struggling for survival.

“While other categories are seeing a decline in valuations and capital raising, generative AI companies are not,” Daver said.

According to Hu, market valuations for generative AI companies have been sky high, while everything else has contracted.

‘It’s difficult to keep up.’

OpenAI, the ChatGPT creator, is valued at nearly $30 billion by Microsoft, despite continuing to burn through money at a rapid pace, he said.

Entrepreneurs specialising in generative AI claim they no longer need to scream for attention or walk through the details of what they are attempting to offer.

“It’s really helped us a lot,” said Sarah Nagy, founder of Seek AI, a startup that allows non-specialists to extract technical data from databases using queries written in everyday language.

“I had to explain what generative AI is and why it matters before ChatGPT,” she added.

The demand for ChatGPT-like capabilities now appears to be limitless, and not just among investors.

“Customer demand has increased significantly,” Nagy said. “It’s even more difficult to keep up because we’re still a small business.”

The entrepreneur wants to expand her team, and while the trend is to downsize, “we are currently hiring” in generative AI, according to Daver.

In recent weeks, the news has primarily focused on the titans, most notably Microsoft, OpenAI’s partner and investor, followed by Google, which is attempting to keep up.

But, in their wake, a galaxy of start-ups has ideas to offer.

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

In addition to traditional venture capitalists, tech behemoths such as Google, which recently invested $300 million to acquire 10% of newcomer Anthropic and its chatbot Claude, are on the lookout.

Hu believes the ChatGPT “gold rush” will be unprecedented and will extend far beyond Generative AI because the technology itself eliminates the need for a computer coder or designer to execute ideas.

“No longer do you need a Stanford PhD in computer science to build something amazing on top of ChatGPT and other foundation models in a weekend.”

“This wave of AI could be bigger than mobile or the cloud, on the scale of the Industrial Revolution, which changed the course of human history,” Hu said.

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