Can I invest in OpenAI ChatGPT?
Investing in cutting-edge technology like OpenAI’s ChatGPT might seem like an enticing opportunity, especially with the hype surrounding artificial intelligence (AI) at an all-time high. However, if you’re hoping to directly buy stock in ChatGPT, you’re out of luck. OpenAI, the visionary company behind ChatGPT, is a private entity and not publicly traded, which means that you can’t buy stock directly in ChatGPT. But don’t get too discouraged; there are plenty of ways to get exposure to this groundbreaking technology through investments in companies associated with OpenAI. In this article, we’ll explore how you can invest in ChatGPT indirectly, discuss the potential of generative AI, and weigh the pros and cons of such an investment strategy.
Recent advancements in AI and, specifically, in ChatGPT have taken the world by storm. From crafting poetry to explaining complex subjects in user-friendly formats, generative AI has demonstrated capabilities that astound both technologists and everyday users. Following its November 2022 launch, ChatGPT managed to attract 100 million users within just two months. With its power and flexibility, this technology is set to disrupt industries, from internet search to content creation. And while you can’t directly own a piece of ChatGPT, there are several companies that are heavily investing in and benefitting from this powerful technology. Ready to dive in? Let’s explore how to invest in the AI revolution!
How to invest in ChatGPT
The most straightforward way to gain exposure to ChatGPT is through investing in companies that have a significant stake in OpenAI. Here are three key players in the tech world associated with ChatGPT, along with their impact on the AI ecosystem.
1. Microsoft (NASDAQ: MSFT)
Microsoft is a tech behemoth known for its extensive portfolio, which includes popular products like Windows, Office Suite, Azure, and gaming products under the Xbox brand. However, its strategic partnership with OpenAI is what has gained particular attention recently. Microsoft has invested billions into OpenAI since their partnership began in 2019, particularly making headlines with a whopping $10 billion investment after ChatGPT’s launch. This shows Microsoft’s deep-rooted belief in the potential of AI as the next major computing paradigm.
This partnership has resulted in various innovations integrated across Microsoft’s products, like the Azure cloud platform and Copilot—Microsoft’s AI-driven workspace assistant. With more than 65% of Fortune 500 companies using Azure OpenAI, the adoption of these AI tools is extensive. Microsoft has reported that the introduction of AI features contributed significantly to its revenue, with a 29% increase in LinkedIn income directly tied to these innovations. If you’re looking to invest in a company with a close relationship to OpenAI and ChatGPT, Microsoft is your best point of entry.
2. Nvidia (NASDAQ: NVDA)
Nvidia, primarily known for its graphics processing units (GPUs), has established itself as the leading supplier of powerful computing hardware necessary for AI applications. Its positioning as a critical supplier for AI platforms, especially since the rise of interest in generative AI, makes it another lucrative option for investors. As AI systems like ChatGPT require enormous computing power, Nvidia’s chips have become essential for running these advanced models.
Revenue from Nvidia has skyrocketed, tripling over several quarters, largely due to the demand created by AI. UBS estimates that Nvidia’s GPUs trained up to 10,000 units used in creating ChatGPT, while analysts predict that 30,000 GPUs now run the chatbot system. Furthermore, the collaboration between Nvidia and Microsoft, which aims to create a massive AI cloud computer with tens of thousands of GPUs, demonstrates the strength of their partnership. This heightened demand for GPUs positions Nvidia as a robust investment for anyone looking to capitalize on the AI boom.
3. Arm Holdings (NASDAQ: ARM)
If you’re interested in a lesser-known option for investing in AI, Arm Holdings is worth considering. The company’s low-power CPU architecture is gaining traction as the demand for AI technologies grows. Arm’s unique business model—earning revenue through licensing its designs, then additional royalties when those products hit the market—has resulted in significant growth alongside the increasing demand for AI. For instance, Microsoft’s recent Cobalt CPU utilizes Arm architecture, reflecting the robust integration of their technology in the AI space.
In its latest earnings report, management noted that AI demand and rising adoption of compute subsystems are driving record revenue growth, with licensing revenue increasing by 72%. As generative AI technologies like ChatGPT see accelerated adoption, Arm’s prospects appear tied to this broader trend, making it a strong contender for your investment portfolio.
Exchange-Traded Funds (ETFs) with exposure to ChatGPT
While you can’t directly invest in ChatGPT or OpenAI via ETFs, a variety of funds are focused on companies related to AI and generative technologies, including ChatGPT. Investing in these ETFs can provide you with a diversified portfolio that includes companies poised to benefit from the growth of AI. Here are a couple worth considering:
1. Invesco AI and Next Gen Software ETF
The Invesco AI and Next Gen Software ETF (IGPT) focuses on stocks closely tied to generative AI and companies like OpenAI. Its top holdings include industry giants like Alphabet, Nvidia, and Meta Platforms, all investing heavily in the AI landscape. The ETF derives its framework from the STOXX World AC NexGen Software Development Index, which includes enterprises at the forefront of software development technologies. With an expense ratio of only 0.6%, this ETF offers a potentially appealing way to capitalize on the AI trend.
2. Roundhill Generative AI & Technology ETF
If you’re interested in a more specialized investment approach, look into the Roundhill Generative AI & Technology ETF (CHAT). This ETF focuses specifically on companies tied to generative AI technologies. It aims to provide exposure to firms that are developing or using AI-powered solutions, making it an attractive pick for investors looking to tap into the AI revolution with less individual company risk.
Should you invest in ChatGPT-related companies?
Before you pack your bags and set off on an investment journey in the promising world of AI, let’s address the practicalities of investing in ChatGPT-related companies. First, consider the level of risk you’re willing to take. While companies like Microsoft, Nvidia, and Arm Holdings have demonstrated growth linked to AI, like any investment, there’s always the risk of fluctuations in the market and potential setbacks in technology.
Second, you should think about diversification. As an investor, it’s crucial to spread your investments across various assets to mitigate risks associated with market volatility. Investing in ETFs that include multiple companies can reduce the risk involved with picking individual stocks.
Lastly, keep abreast of technological advancements and market conditions. The AI landscape evolves rapidly, and staying informed about trends, breakthroughs, and competitor movements will help you make better investment decisions. Companies tied to generative AI are likely to experience growth, but it’s critical to evaluate whether any one company is well-positioned to capitalize on advancements in AI technologies independently.
The Bottom Line
While you can’t buy shares in ChatGPT itself, the technology has undeniably created a ripple effect that’s transforming the investment landscape. Companies like Microsoft, Nvidia, and Arm Holdings are closely tied to this technology through direct partnerships, research and development, and infrastructure necessary to support AI’s growth.
By investing in these key players or considering ETFs focused on AI-related technologies, you can certainly get exposure to the remarkable potential of generative AI through ChatGPT. Be diligent in your research, weigh the risks, and keep your eyes on the ball as the AI revolution continues to unfold. Before you know it, you could be riding the wave of this cutting-edge technology, reaping the rewards of one of the most exciting advancements in modern computing!