According to a report from Precedence Research, the global chatbot market value touched about $0.84 billion in 2022 and is estimated to reach $4.9 billion by 2032. The report said that North America generates the highest market share, at around 41%, in this space.

While investors can’t directly take a position in privately owned OpenAI, there are a number of technology stocks that are well-positioned to benefit from the rise in advancements and adoption of AI technologies. This article focuses on news about 10 such companies that are at the forefront in the development of chatbots, discusses what artificial intelligence (AI) and chatbots are, and reviews 10 AI stocks you can invest in.

What is a Chatbot?

According to Oracle, (and I paraphrase) at the most basic level, a chatbot is a computer program that simulates and processes human conversation - either written or spoken - allowing humans to interact with digital devices as if they were communicating with a real person be they rudimentary programs that answer a simple query with a single-line response, or sophisticated digital assistants that learn and evolve to deliver increasing levels of personalization as they gather and process information. IBM makes the point that, while "not all chatbots are equipped with artificial intelligence, modern chatbots increasingly use conversational AI techniques like natural language processing to understand the user’s questions and automate responses to them."

What Is Artificial Intelligence (AI)?

As defined by IBM, (and again I paraphrase) AI combines computer science and robust datasets, including machine learning and deep learning, into AI algorithms that seek to create expert systems that make predictions or classifications based on input data.  Systems that execute specific tasks in a single domain are giving way to broad AI that learns more generally and works across domains and problems driven by foundation models that are trained on large, unlabeled datasets and fine-tuned for an array of applications. When it comes to generative AI (which takes raw data and “learns” from it to generate statistically probable outputs when prompted to create a new work that’s similar, but not identical, to the original data) it is predicted that foundation models will dramatically accelerate AI adoption in the enterprise.

How Does ChatGPT Work?

Zapier defines ChatGPT, an app created by OpenAI, as taking the prompts you write, running them through its GPT 3 (which stands for Generative Pre-trained Transformer) or GPT 4 AI systems, and returning the results back to the app so you can read them in a conversational style.

Below is the latest news about 10 companies that have AI developments lately and how their stocks have responded YTD,

1. Amazon (AMZN): UP 273.9% YTD
   • has announced the general availability of Bedrock, a service that allows Amazon Web Services customers to build apps on top of generative AI models and customize them with their proprietary data to create AI “agents” that can automatically execute tasks like booking travel, managing inventory and processing insurance claims, from Amazon itself and third-party partners through an API;
   • is initially investing $1.25 billion for a minority stake in Anthropic (see here) which, like Google’s Bard and Microsoft-backed OpenAI, also operates an AI-powered, text-analyzing chatbot and has the option to increase its investment in Anthropic to a total of $4 billion. Anthropic plans to build a “frontier model” chatbot that is 10 times more capable than today’s most powerful AI but cautions that it will require a billion dollars in spending over the next 18 months.
2. Meta Platforms (META): UP 149.5% YTD
   • has announced that it:
     • has trained its new AI virtual assistant using public posts from Facebook and Instagram, while taking measures to exclude private data and respect user privacy. Source: Reuters.
     • is set to unveil several generative AI chatbots with personalities, apparently with an eye toward attracting young users (see here), and
     • is developing a more powerful large language model to rival OpenAI’s latest work with GPT-4, the model that underpins ChatGPT and Bing, for release next year.
3. Tesla (TSLA): UP 103.1% YTD
   • Elon Musk has his sights set on challenging OpenAI in the artificial intelligence startup space with the creation of a new AI company, X.AI Corp.  as part of a wider plan to create a so-called everything app under the brand “X." Since it was just founded in July, and is privately held, its scope of work is not yet known.
4. Alphabet (GOOGL): UP 48.3% YTD
   • Google released its newest AI chatbot version of Bard (see here) on September 19 whose new features elevate Bard from a regular chatbot into something much closer to a personal assistant.
   • You can collaborate with Bard in over 40 languages, including Arabic, Chinese, German, Hindi and Spanish.
   • You can also now access Bard in more places, Unfortunately, Canada is excluded from the release (see here) as a result of the federal government of Canada fighting with Google over the Online News Act.
5. Microsoft (MSFT): UP 31.7% YTD
   • OpenAI, backed by Microsoft, has announced that ChatGPT users (OpenAI is still limiting who can use the latest version) now have the ability to:
     • browse the internet, expanding its data access beyond its initial September 2021 knowledge cutoff. (Reuters) and
     • interact with AI through text, images, and even videos (referred to as “multimodality”) and make sense of them. 
   • The chatbot's ability to assist with creative tasks, solve complex problems, and generate images using Bing's Image Creator sets it apart from other search engines.
   • The upcoming integration of Bing Chat into Windows 11 through Windows Copilot further emphasizes Microsoft's vision for a more interactive and informative search experience. Source
6. Baidu (BIDU): UP 16.9% YTD
   • is a Chinese tech company that has opened public access to its ERNIE Bot, allowing users to conduct AI-powered searches or carry out an array of tasks, from creating videos to providing summaries of complex documents.
   • According to CNN, while ERNIE Bot is available globally, its interface is only in Chinese, though users can enter both Chinese and English prompts.
7. IBM (IBM): No Change YTD
   • has developed an AI chatbot, known as IBM Watson Assistant, that uses machine learning, deep learning, and natural language processing to understand questions and give the best answers through conversational AI.
     • IBM isn't competing directly with chatbots like ChatGPT or search-based chat but, instead, focuses on enterprise customers which makes up a large market for AI chatbots and, as such, gives investors exposure to another opportunity in AI chatbots.
8. SenseTime Group (SNTMF): UP 66.7% YTD
   • is an AI startup based in Hong Kong that launched its SenseChat platform in late August which allows users to write or debug code more efficiently or receive personalized medical advice from a virtual health consultation assistant.
9. Alibaba (BABA): DOWN 1.5% YTD
   • China’s biggest e-commerce company has released:
     • an open-sourced model called Qwen-7B in August that allows researchers, academics and companies globally to use the model to create their own generative AI apps without needing to train their own systems, saving time and expense, a version designed for conversational apps, called Qwen-7B-Chat, that can analyze images and respond to questions about them using natural language and
     • launched an artificial intelligence tool in July called Tongyi Wanxiang that allows users to input prompts in Chinese and English and the AI tool will generate an image in various styles such as a sketch or 3D cartoon.
10. Zhihu (ZH): DOWN 20.0% YTD
    • China’s largest Q&A platform has started testing an open-source large language model and generative AI product named Luca at the end of May in collaboration with Model Best, a Beijing-based startup engaged in artificial intelligence models, joining the chatbot race to offer a potential rival to ChatGPT.
      • It has versatile capabilities in writing essays and programming code, making business plans, mathematical reasoning and understanding the Chinese language and culture. Source

In total, the 10 AI chatbot development company stocks are UP 54.4%, on average YTD as compared to the top 10 companies developing quantum computing company stocks that are UP 67.9% YTD. 

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