5 Major Tech Players Competing With ChatGPT Technology

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ChatGPT has sparked AI competition among the world’s biggest tech players, including Alphabet (GOOGL - Free Report), Meta Platform (META - Free Report), Snap (SNAP - Free Report), Alibaba (BABA - Free Report), and Baidu (BIDU - Free Report) among others. Many tech companies worldwide are adding to the hype generated by ChatGPT, which is an artificial intelligence chatbot developed by OpenAI.

ChatGPT uses a machine learning technique called reinforcement learning from human feedback to emulate human-written conversations based on a large range of user prompts. Users can ask ChatGPT various questions, write essays, and even generate code.

The emerging technology is representative of a niche sub-sector in the AI industry known as generative AI — systems that can generate text, images, or sounds in response to prompts given by users. It is driven by a large language model, which means it uses a lot of data to understand and generate conversations.

Per a Precedence Research report, the global AI market is expected to witness a compound annual growth rate (CAGR) of 38.1% to reach $1.59 trillion by 2030 — although the impact that OpenAI’s ChatGPT will have on this space is hard to predict as yet.

More than a million people engaged with ChatGPT within the first week of its launch for free public testing on Nov 30, 2022. Based on this success, OpenAI has been working on a more powerful version of the ChatGPT system called GPT-4, which is set to be released in 2023, possibly in the first quarter of the year.

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Microsoft’s Strengthening Relationship With OpenAI

Since 2019, Microsoft (MSFT) has invested at least $3 billion in OpenAI to help the small tech firm create its ultra-powerful AI chatbot. The company announced in mid-January that as part of the third phase of its partnership with OpenAI, it will make a multiyear, $10 billion investment. The funding conditions stipulated that Microsoft would get 75% of OpenAI's income until the point at which OpenAI earns back its initial investment from ChatGPT and other businesses like the image creation tool Dall-E.

The company is hopeful that advancements in generative AI may have the potential to increase revenues for its Azure cloud computing business as OpenAI officially licensed its technologies to Microsoft in 2020. Microsoft is set to leverage ChatGPT in its search engines Bing and Office apps like Word, PowerPoint, and Outlook. Recently, Microsoft announced that it is releasing a big update to Windows 11 that adds the company’s new AI-powered Bing search to the taskbar.

Chinese Tech Giants Join the AI Chatbot Frenzy

Chinese AI stocks are the latest rage in mainland markets as the global frenzy around the Microsoft-backed ChatGPT chatbot spurs speculative bets on the revolutionary computing technology.

Baidu is expected to unveil its ChatGPT rival in mid-March. This Zacks Rank #1 (Strong Buy) company is testing its chatbot called Ernie bot in English or Wenxin Yiyan in Chinese. 

Ernie stands for Enhanced Representation through Knowledge Integration, describing it as a large language model that was introduced in 2019. Baidu plans to embed Ernie Bot into its search service first, which the company thinks will attract more users and boost market share in a profitable manner. The company intends to make the bot widely available to its intelligent driving unit and its business partners eventually. It expects more business owners and entrepreneurs to build their models and applications on Baidu’s AI Cloud.

Alibaba, the world’s leading Chinese e-commerce company, is developing a competitor to ChatGPT and stated that it has been working on generative AI since 2017. This Zacks Rank #1 company is yet to provide any specific timeline for launching its ChatGPT competitor. If Alibaba.com implements generative AI technology like ChatGPT, Alibaba.com sellers could benefit by providing personalized customer service and support to potential buyers, thus enhancing customer experience and increasing the likelihood of sales. ChatGPT-style technology could assist sellers with inventory management by providing insights into which products are popular with customers and predicting demand, which can the company optimize its inventory and reduce the risk of stockouts or overstocking.

Other Tech Giants Challenging ChatGPT

Meta Platform is releasing a new AI tool LLaMA, short for Large Language Model Meta AI, thus becoming the latest tech giant to up its AI game in the weeks since language bot ChatGPT spiked global interest in AI-powered technologies. This Zacks Rank #2 (Buy) company is starting by testing text-based AI tools on WhatsApp and Messenger — presumably ChatGPT-styled conversation bots. While these could be a fun use case for users, Meta could also eventually leverage these features by offering them to businesses in areas such as sales and customer support. Meta is also experimenting with AI-aided filters and ad formats on Instagram along with "video and multi-modal experiences."

Alphabet subsidiary Google is set to launch its answer to ChatGPT in the first half of 2023. Known as Bard AI, the chatbot has been under development for the past two years and entered the testing phase in early February. Ultimately, the company will incorporate AI technology into its Google Search tool. This Zacks Rank #3 (Hold) company is using large language models to strengthen its search engine, specifically by helping anticipate the intent of users' queries, Philipp Schindler, Google’s chief business officer, said on the company’s fourth-quarter earnings call. AI is also used to increase consumer interactions with ads.

Recently, Snap also launched a custom-trained chatbot called My AI for its paid subscribers. My AI chatbot will be pinned in the conversations tab with friends and family. The chatbot is created more like a persona, just like any other friend on Snapchat. The primary difference between ChatGPT and Snapchat’s version is that the Snapchat version is more restrictive and adheres to the company’s safety and trust guidelines. My AI is trained by Snapchat’s employees to make it follow the company guidelines. The latest feature addition of My AI is expected to boost subscriber growth and drive the top line for Snap as lack of revenue diversification is a major concern for this Zacks Rank #4 (Sell) company.

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