Unfortunately, non-accredited investors cannot currently purchase shares of OpenAI, the parent company that owns ChatGPT. There is no direct way for standard retail investors to ride the wave of OpenAI’s incredible growth, but there are some indirect ways to profit off the AI tsunami.
In this article, we’ll look at several of the ways investors could enter the AI market, and potential future changes that could lead to people purchasing ChatGPT stock directly.
Of course, none of this is financial advise, just general information.
If Only You Could Purchase ChatGPT Stock Directly!
ChatGPT has had the most rapid user adoption of any technology on the history of the planet. It’s obvious that retail investors would love to get in on this action and profit off the explosion of generative AI systems.
But unless you’re an accredited investor, hedge fund, etc. you cannot purchase shares of OpenAI directly at the moment. However, there are several ways you can profit off of generative AI, by investing in adjacent public companies.
Obvious candidates for investment include:
- Microsoft (MSFT) – Partner in OpenAI, and the company most closely connected to OpenAI. Bing/Copilot, Microsoft’s branded AI Large Language Model, has ChatGPT as its back end
- NVidia (NVDA) – The chipmaker that creates the chips that power all AI systems
- Google (GOOG) – The search giant has its own AI offerings, and has invested in Anthropic, makers of Claude AI
- Meta (META) – Meta is following an open source strategy, publishing the Llama LLM as a free software that users can download and run on their own machines. They have also published an image editing model
Let’s break these down individually.
Investing in Microsoft: A Strategic Gateway
One of the most direct paths to invest in the potential of ChatGPT is through Microsoft. As a key investor in OpenAI, Microsoft’s fortunes are closely tied to the success of ChatGPT and other OpenAI projects. Microsoft’s investment isn’t just financial; it’s strategic, incorporating ChatGPT’s capabilities into their products and cloud services.
For investors, buying Microsoft stock could be a prudent way to gain exposure to ChatGPT’s advancements and adoption in various industries.
We’ve talked about Bing here.
NVidia: Powering the AI Revolution
Another intriguing investment option is NVidia, known for their powerful GPUs that are integral to running complex AI algorithms.
NVidia’s technology is at the heart of many AI advancements, including those made by ChatGPT. By investing in NVidia, you’re essentially betting on the infrastructure that powers AI growth, which is a cornerstone of technologies like ChatGPT.
If you haven’t been paying attention, NVidia’s stock price has rocketed up in a way that mirror’s OpenAI’s development.
Google: A Pioneer in AI Development
Google, under its parent company Alphabet, has been a pioneer in AI and machine learning for years. Until OpenAI unleashed ChatGPT in November of 2022, Google was seen as the clear leader in AI tech.
Their advancements in AI technologies are not just limited to search algorithms but extend to various sectors including healthcare, chess playing, autonomous driving, and natural language processing, similar to what powers ChatGPT.
They have the Search Generative Experience, Google Bard, and a large investment in Claude 2 by Anthropic.
Key Points for Investors:
- Google Gemini: Google Gemini Pro has been integrated into Google’s Bard LLM. This tech specs out at the same or better than ChatGPT 3.5, the free version of ChatGPT. And Google Gemini Ultra supposedly surpasses ChatGPT-4, but it has not yet been released to the public yet.
- DeepMind: Owned by Alphabet, DeepMind is a leader in AI research. Their work in deep learning and AI for health and science is groundbreaking.
- AI-Driven Services: Google’s services like Google Assistant, Google Translate, and various AI-driven cloud services are integral parts of its AI strategy.
- Investment Potential: By investing in Alphabet, you’re tapping into a broad spectrum of AI initiatives, not just generative AI but also other pioneering AI technologies.
We’ve talked about Google Bard here and here, and compared it to ChatGPT here.
Meta: Focusing on AI for Social Connectivity
Meta, has been pursuing an open-source strategy (which, interestingly, is what OpenAI was originally planning to do!) Meta has released LLAMA 2, an open-source LLM that you can download and run on your computer, no need to access the internet at all.
Meta has also released some image generation AI software similar to Dall-E and Midjourney, known as MetaAI.
This Generative Adversarial Network (GAN) will be integrated with Facebook, Instagram, WhatsApp, etc, and can be found here.
Key Points for Investors:
- AI for Social Media: Meta uses AI for content moderation, targeted advertising, and enhancing user engagement across its platforms.
- VR and AR Initiatives: Meta’s investment in virtual and augmented reality, under its Oculus brand, is heavily reliant on AI, indicating a long-term strategy in this area.
- Investment Considerations: Investing in Meta gives investors exposure to AI applications in social media and future technologies like VR and AR, which are expected to be heavily AI-driven.
OpenAI’s Unique Corporate Structure and Investment
OpenAI’s corporate structure is unique and worth understanding. Originally established as a non-profit, OpenAI later created a capped-profit arm to attract capital while maintaining a broad ethical commitment to AI development.
This structure ensures that profits are reinvested in alignment with their mission, which might impact how and when OpenAI could approach an IPO.
The tumult that occurred in October of 2023 when Sam Altman was briefly removed as CEO of OpenAI laid bare the issues with the non-profit/for profit confusion. Unwinding this structure may be necessary for OpenAI to access public markets
The Potential for a Future OpenAI IPO: What It Could Mean for Investors
The prospect of an OpenAI IPO is a topic of much speculation. Given OpenAI’s capped-profit model, an IPO could be unconventional. Potential investors should be aware that this model could impact shareholder returns, as OpenAI’s primary commitment is to reinvest profits for the benefit of humanity at large.
This means that while an IPO could offer a more direct investment in ChatGPT, it may come with different expectations than a typical tech IPO.
Diversification: A Key Strategy
As with any investment, diversification is vital. While Microsoft, Google, Meta, and NVidia offer pathways to invest in the AI trend, it’s essential to balance your portfolio across various sectors and investment types. The AI race is still wide open, and it seems every day a new generative AI system is released or updated.
Generative AI technology is unquestionably the fastest moving area of the world economic landscape, and probably every large company is thinking about how to fit these tools into its product mix. Here are a few additional ideas to enter the AI market that are a bit further out than the major players mentioned above:
- Amazon (AWS and Alexa AI): Amazon’s AI initiatives, particularly through its cloud computing arm AWS and voice assistant Alexa, are significant. AWS offers a wide range of AI services and tools for businesses, making it a substantial player in the AI infrastructure space. Investing in Amazon can be a way to gain exposure to the enterprise AI market.
- IBM (Watson and AI Solutions): IBM has been a long-standing leader in AI with its Watson platform. Its focus on AI for business solutions, healthcare, and enterprise-level AI services can provide a different investment perspective, especially for those interested in AI applications in professional sectors.
- Tesla/Elon Musk (Self-Driving Cars, Grok AI): Tesla is at the forefront of the self-driving car revolution (along with competitors like Cruise and Waymo) which makes heavy use of machine learning and AI tech. Additionally, Elon Musk is tying Twitter/X’s generative AI known as Grok with Twitter Blue premium access. X is technically not owned by Tesla, but they are clearly connected through Elon Musk.
- Intel (AI Processors and Neural Network Technology): Intel, traditionally known for its CPUs, is also investing heavily in AI through the development of specialized processors and neural network technology. This positions Intel as a key hardware provider in the growing AI market.
- Salesforce (Einstein AI): Salesforce’s Einstein AI integrates AI into customer relationship management (CRM), offering intelligent insights and predictions for sales, service, and marketing. This represents an investment opportunity in the application of AI in the business software industry.
- Baidu (Chinese AI Market): For those interested in the global AI scene, Baidu, often referred to as the “Google of China,” is a leading player in the Chinese AI market. Their investments in AI, from search engines to autonomous driving to the Ernie chatbot, offer a gateway to the burgeoning Asian AI market.
- Startups and Venture Capital Funds: Investing in venture capital funds that focus on AI startups can be a way to get exposure to emerging players in the AI space. This is riskier but can offer higher rewards if a startup succeeds.
- ETFs Focused on AI and Tech Innovation: Exchange-Traded Funds (ETFs) that focus on AI and technological innovation can provide a diversified investment in a basket of companies involved in AI. Examples include the Global X Robotics & Artificial Intelligence ETF (BOTZ) and the ARK Autonomous Technology & Robotics ETF (ARKQ).
- Semiconductor Companies: Beyond NVidia, companies like AMD and Qualcomm are also crucial in the AI hardware space, providing essential components for AI computations.
Incorporating these companies and investment angles can provide readers with a broad spectrum of options to consider when looking to invest in the generative AI space. It’s important to remind readers to conduct thorough research and consult with financial advisors to align these investments with their financial goals and risk tolerance.
Conclusion: Navigating a Dynamic Investment Landscape
Investing in the AI revolution, specifically in ChatGPT, presents exciting opportunities and unique challenges. While direct investment in OpenAI isn’t currently an option, avenues through Microsoft, NVidia, and competitors like Google and Meta, are easily available. Keeping an eye on OpenAI’s future moves can provide retail investors with a chance to be part of this transformative technology.
As always, stay informed, diversified, and aligned with your investment goals and risk tolerance. The AI landscape is rapidly evolving, and so are the investment opportunities it presents. Sign up for our mailing list and we’ll keep you updated on the latest AI tech.
