Artificial Intelligence (AI) is undoubtedly one of the most transformative technologies of the 21st century. It’s no surprise, then, that investors across the globe are seeking opportunities to be a part of this revolution.
One particularly promising avenue is ChatGPT, the conversational AI developed by OpenAI. If you’re considering investing in ChatGPT or just to understand betterstand the process of investing in tech companies like it, you’re in the right place.
Before diving into investment strategies, it’s important to undersChatGPTPT is and why it’s seen as a promising investment. GPT, or Generative Pretrained Transformer, is an AI system that uses machine learning techniques to generate human-like text. ChatGPT is a version of this system that has been optimized for conversation. It’s used in everything from customer service chatbots to personal digital assistants, creating countless applications and therefore, potential revenue streams.
The Path to Investing in AI: Public or Private Markets
OpenAI, the company behind ChatGPT, was a private company. Investing in private companies is quite different from investing in public ones. Here’s what you need to know:
Private Markets: Investing in private companies typically involves buying shares directly from the company or from early investors. This often requires significant upfront capital and comes with a higher level of risk due to limited liquidity and lack of regulatory oversight compared to public markets. Opportunities to invest in private companies are typically limited to accredited investors, who must meet certain income or net worth requirements.
Public Markets: If OpenAI were to go public, investing in ChatGPT would become a lot simpler for most people. You would be able to buy shares of OpenAI through a broker, just as you would any other public company. Going public would also mean that OpenAI would be subject to more regulatory oversight, which could provide additional protection for investors.
Investing in a specific technology or product like ChatGPT, especially when it’s owned by a private company like OpenAI, can be a challenge. However, there are several indirect methods to invest in such technology that can provide exposure to the AI market and its potential growth.
Here are a few strategies:
Ways to Invest in AI
1. Investing in Publicly Traded AI Companies
While you might not be able to invest in OpenAI directly, there are numerous other companies operating in the AI space that are publicly traded. For instance, companies like Alphabet (Google’s parent company), Microsoft, IBM, and Nvidia are heavily involved in AI research and development.
By investing in these companies, you can gain exposure to the growth of AI technology.
Recently, Microsoft invested $10 billion into OpenAI, which can provide an indirect way for investors to take advantage of ChatGPT’s success.
You can invest in publicly traded AI companies through an online brokerage like eToro.
2. ETFs and Mutual Funds
Exchange-traded funds (ETFs) and mutual funds focused on AI and technology sectors provide another indirect investing option.
These funds pool money from a number of investors to create a diverse portfolio of investments in AI and tech companies. For example, the Global X Robotics & Artificial Intelligence ETF (BOTZ) and the ARK Innovation ETF (ARKK) are two such funds. While ChatGPT might not be a part of their portfolio, these funds can still provide exposure to the broader AI and tech markets.
3. Investing in Partners or Customers of OpenAI
If there are companies using ChatGPT technology in their products or services, investing in these companies could indirectly provide exposure to ChatGPT.
Similarly, if any publicly traded company is a known partner or sponsor of OpenAI, it could also be a potential investment target. However, it’s important to thoroughly research these companies to ensure that they have a strong overall business model and are not reliant solely on ChatGPT for their success.
4. Venture Capital or Private Equity Funds
These are pools of capital that invest in a range of private companies, including tech startups. Some may have exposure to AI companies like OpenAI. However, it’s important to note that these types of investments typically come with higher risk and are more illiquid compared to investing in public companies or ETFs.
Unfortunately, investing in private equity or Venture Capital is usually only available to the ultra-wealthy.
5. AI-related REITs
Datacenter Real Estate Investment Trusts (REITs) are an indirect way to invest in the infrastructure that supports AI development and deployment. As AI technologies grow and evolve, the need for robust data storage and processing facilities will also increase, which could benefit these REITs.
Investing in cutting-edge technology like ChatGPT requires staying up-to-date with the latest developments in the field. This includes not just technological advancements, but also regulatory changes and competitive dynamics.
Reading tech and finance news, attending industry conferences, and even following key influencers in the AI space on social media can all help you stay informed. Understanding the broader context will help you make more informed investment decisions.
The Bottom Line
Investing in ChatGPT and other AI technologies can be an exciting way to be part of the AI revolution. However, like any investment, it requires careful research, risk assessment, and strategic planning. Whether you’re an experienced investor or a newbie, following the strategies above can help you navigate the path to investing in this rapidly evolving field.