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This is an edition of The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here.<\/p>\n
During prime-time football last Sunday, OpenAI debuted its biggest ad campaign yet, emphasizing three possible uses for ChatGPT: making dinner recipes, creating workout routines, and planning road trips. As romantic as pasta \u00e0 la ChatGPT sounds, the simplicity of these chatbot queries raises a question: Is the company really worth the hundreds of billions of dollars its investors say it is?<\/p>\n
The market certainly thinks so. Yesterday morning, OpenAI became the most valuable privately held company in the world, worth $500 billion. (OpenAI has a corporate partnership with The Atlantic.) That\u2019s thanks to a new stock sale and recent agreements with the chipmaking giant Nvidia, which plans to invest up to $100 billion in OpenAI, and the cloud-computing company Oracle, to which OpenAI will pay $300 billion for a massive chunk of its computing power. The result is a curiously recursive cash flow, because Oracle already committed to buying chips from Nvidia in May. In other words, Nvidia will pay OpenAI, which will pay Oracle, which will pay Nvidia.<\/p>\n
All this while OpenAI is reportedly set to hemorrhage more than $1 billion this year. Much like the tech unicorns of decades past (think Uber, WeWork, and Spotify), the company is confident enough in its eventual dominance that it\u2019s willing to operate at a loss in the near term. ChatGPT\u2019s arrival, in 2022, was revolutionary, and it was easy to see why its parent company secured such astronomical investments and major partnerships during the initial funding frenzy. An AI chatbot that does homework, writes emails, ships code, and doles out free therapy? There\u2019s a reason it has, according to the company\u2019s tally, 700 million active users each week.<\/p>\n
In the years since, things have gotten a bit more complicated. AI still \u201challucinates\u201d wildly in its responses (in other words, it tends to make things up), and there are now numerous reports about the dangers it poses to users\u2019 mental health: The Wall Street Journal wrote in August that sycophantic ChatGPT became a \u201ctrusted sidekick\u201d to a paranoid man who eventually killed his mother and himself (OpenAI preempted the article with a blog post about its focus on \u201cpeople using ChatGPT in the midst of acute crises,\u201d and told the Journal that the bot had encouraged the man to seek professional help).<\/p>\n
But none of this has slowed the breakneck speed of the AI race. In the case of OpenAI in particular, the attitude is growth at all costs, a path to long-term dominance that those betting on OpenAI say could mirror what Amazon pulled off in the early 2000s. (OpenAI is now also dipping a toe in social media with a powerful new video-generation app, indicating yet another area of interest for the company.) On their own, none of these features is generating the kind of return that would justify OpenAI\u2019s sky-high valuation\u2014at least not yet. But if the company gets its way, preparing a recipe or planning a vacation without an assist from the chatbot might start to feel alien, similar to the way people have come to rely on real-time directions from Google Maps or blazing-fast grocery delivery from Instacart. Whether enough people will choose to pay directly for ChatGPT to meet investors\u2019 expectations is an open question.<\/p>\n
Generative AI is still very much a bet on the future; concrete returns are potentially years away. If the gamble doesn\u2019t pay off, the market for AI could collapse. Many have compared the hype over AI to early internet hype and the infamous dot-com bubble of the late 1990s. Altman and Meta CEO Mark Zuckerberg, another true believer in AI, have acknowledged that a hypothetical AI bubble could pop too. As of now, consumer spending doesn\u2019t even come close to meeting institutional investment: Research from the VC firm Menlo Ventures suggests that only about 3 percent of AI users pay for any sort of service\u2014that\u2019s about $12 billion, while the industry is projected to spend up to $3 trillion by 2028.<\/p>\n
But to hear a venture capitalist tell it, the promise of AI is powerful enough on its own to justify the sort of long-term value that would preclude a bubble. The investors going all in on early-stage AI start-ups are broadly confident that AI can save companies time, and therefore money, across industries. The problem is figuring out how to implement that technology in a way that can juice profits without confusing or impeding workers. Researchers at McKinsey recently put out a report diagnosing a generative-AI \u201cparadox\u201d: the contradiction between companies\u2019 high AI-adoption rates and how little that seems to improve their bottom line. AI chatbots can still do only so much\u2014human beings are often needed to correct their work. According to a report published by S&P Global this year, 42 percent of the companies that have tried out AI pilot projects abandoned the majority of them.<\/p>\n
The result is a disconnect between what goes in and what comes out. OpenAI is worth more than Norway\u2019s GDP; its employees are raking in princely sums, and its expenditures on everything from development to operations to raw computing power are, by any metric, extreme. But there\u2019s no guarantee that AI chatbots will be the revenue-inflating productivity accelerators their biggest boosters hope they will be. There\u2019s also no guarantee that chatbots will offer the kind of life-changing support for everyday users that these companies claim. Still, the world\u2019s biggest venture capitalists and tech conglomerates are willing to take that chance. Potential regulatory hurdles, implementation bottlenecks, bubble doomersayers, social backlash\u2014none of that seems to matter, at least not yet.<\/p>\n
Related:<\/p>\n
Here are three new stories from The Atlantic:<\/strong><\/p>\n Today\u2019s News<\/strong><\/p>\n Dispatches<\/strong><\/p>\n Explore all of our newsletters here.<\/em><\/p>\n Evening Read<\/strong><\/p>\n Illustration by The Atlantic. Source: Mert Alas and Marcus Piggot.<\/p>\n Taylor Swift\u2019s Fairy Tale Is Over<\/p>\n By Spencer Kornhaber<\/p>\n She doesn\u2019t sound like she\u2019s having fun. She has the team captain, the cushion-cut diamond, the fans who will shell out for yet another branded cardigan\u2014but Taylor Swift\u2019s The Life of a Showgirl, and the life it seems to portray, is a charmless chore. Swift spends her 12th album pondering familiar bummers: rivalries, regrets, the countdown clock of her own mortality. What\u2019s new, narratively, is her football-player fianc\u00e9 and the happily ever after he represents. But she can\u2019t quite convince herself, or the listener, that she\u2019s getting what she\u2019s always said she wants. She\u2019s become too cynical to sell a fairy tale.<\/p>\n Read the full article.<\/p>\n More From The Atlantic<\/em><\/p>\n Culture Break<\/p>\n Paras Griffin \/ Getty<\/p>\n Explore. Bad Bunny\u2019s Super Bowl halftime-show announcement has ignited another round in the culture wars over what \u201creal America\u201d should look like, Xochitl Gonzalez writes.<\/p>\n Reminisce. Jane Goodall, who died Wednesday at 91, was not just a pioneering scientist; she was also an expert at wielding the power of fame, Michelle Nijhuis writes.<\/p>\n Play our daily crossword.<\/p>\n Rafaela Jinich contributed to this newsletter.<\/p>\n When you buy a book using a link in this newsletter, we receive a commission. Thank you for supporting <\/em>The Atlantic.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" This is an edition of The Atlantic Daily, a newsletter that guides you through the biggest stories of the day, helps you discover new ideas, and recommends the best in culture. Sign up for it here. During prime-time football last Sunday, OpenAI debuted its biggest ad campaign yet, emphasizing three possible uses for ChatGPT: making<\/p>\n","protected":false},"author":1,"featured_media":25803,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[55],"tags":[1671,2062,15563],"class_list":{"0":"post-25802","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-social-issues","8":"tag-atlantic","9":"tag-money","10":"tag-vortex"},"_links":{"self":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/25802","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=25802"}],"version-history":[{"count":0,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/posts\/25802\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=\/wp\/v2\/media\/25803"}],"wp:attachment":[{"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=25802"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=25802"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naijaglobalnews.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=25802"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n