Sam Altman is the co-founder of OpenAI, the company responsible for developing ChatGPT. The online chatbot has taken the technology world by storm this year with its ability to answer complex questions, write computer code, and even recognize images.
The business world is only just beginning to unravel the benefits of artificial intelligence (AI), but some lawmakers, experts, and even tech titans have questioned whether companies like OpenAI can retain control of the technology or whether it has the potential to cause harm.
Altman is currently touring the world, meeting with government officials and business leaders to discuss the risks, potential, and even regulation when it comes to AI. While there are genuine concerns, he thinks the productivity gains delivered by the technology will far outweigh its negative impacts. Here are the details, and two stocks that could win big if he's right.
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Businesses and employees will have to adapt to AI
This is a theme discussed by many experts in the know when it comes to artificial intelligence. Cathie Wood, who leads Ark Investment Management, recently commented that knowledge workers (lawyers, scientists, and software engineers, among others) will have to learn to do their jobs differently as AI becomes more widely deployed.
In many cases, the technology will serve as a copilot, which will help employees complete tasks far more quickly. For example, since it has the ability to write computer code and even scan thousands of pages of text instantly, software engineers and lawyers will have to learn how to prompt AI platforms to do their jobs effectively. In Cathie Wood's words, they'll have to become "prompt engineers."
That sentiment was largely echoed by Sam Altman at a talk in Melbourne, Australia, over the weekend. He acknowledged that AI could disrupt many jobs, but it will change many others, allowing workers to operate at a higher level than ever before. He said he was already observing AI doubling productivity in some cases, and it could lead to an increase of a whopping 30 times eventually.
Altman said OpenAI is currently working on different versions of ChatGPT for users who are less tech-savvy. The chatbot will have the ability to adjust its behavior in response to different prompting styles, which will ultimately mean workers with a broader spectrum of skills outside the technology sector will be able to benefit from AI.
Microsoft and C3.ai could be among the biggest winners
As AI-powered tools become more user friendly, businesses of all sizes will likely search for plug-and-play solutions to suit their needs. Microsoft (MSFT 1.82%) and C3.ai (AI 3.02%) are two of the leading service providers already. Think of it this way: If AI is a gold rush, these two companies are selling the picks and shovels, so investors might do well to own shares in both of them.
Microsoft is actually a shareholder in Altman's OpenAI, investing $1 billion in the company in 2019, and a rumored $10 billion earlier this year. It has since been busy integrating ChatGPT into its portfolio of products and services. The chatbot now powers Microsoft's Bing search engine, and it's also available to business customers of its Azure cloud services platform. In fact, in the recent first quarter of 2023, Microsoft said 2,500 companies had signed up to use OpenAI on Azure -- a tenfold increase in just three months.
Microsoft also invested in another AI start-up recently called Builder.ai, which helps nontechnical entrepreneurs build software products using AI. This is yet another instance where learning to prompt will pay dividends, because clear, concise instructions will result in a higher-quality end product.
While Microsoft is a $2.5 trillion behemoth, C3.ai is a far more modest operation, with a valuation of just $4.8 billion. It provides more than 40 prebuilt AI applications suitable for industries spanning financial services to manufacturing to energy. Customers can also request customizations for their specific needs -- basically, C3.ai can be described as an AI-as-a-service company.
It serves 287 business customers right now, including fossil fuel giant Shell, which uses C3.ai's applications to monitor thousands of items of equipment. C3.ai predicts potential equipment failures and helps Shell reduce its carbon emissions, preventing environmental disasters and saving the company untold amounts of money.
Microsoft is the safer bet of the two stocks because of its sheer size and track record, but C3.ai presents a very attractive risk-reward proposition for investors seeking greater potential returns. In any case, if experts like Sam Altman and Cathie Wood are right, millions of businesses around the world will eventually need to tap service providers like these to set themselves up for the AI revolution.
