ChatGPT Changed Everything and Was a Black Swan Event

• ChatGPT has only been publicly available for 6 months.
• It has already upended education and training, hiring, and company share prices.
• It was a black swan event — an unforeseen, rare event that with hindsight looks inevitable.

Bill Gates thinks its creation is as fundamental as the computer chip, the internet, and the PC. Elon Musk wants to put the brakes on development. Warren Buffet is already comparing it to the atomic bomb.

These are all the hyperbolic statements made about artificial intelligence in the six months since the startup OpenAI released ChatGPT to the public, the smart chatbot underpinned by the GPT-3.5 and GPT-4 large language models. 

ChatGPT and other AI tools that can “create” something from nothing, such as image-generators DALL-E and Midjourney, and ChatGPT rival Google Bard, all fall under the new umbrella term generative AI. And since ChatGPT’s release in November, it’s causing as much anxiety as excitement.

At least 49 different listed US companies have mentioned ChatGPT in quarterly earnings results in May 2023 to date, according to an Insider analysis of Seeking Alpha transcripts. It’s a sign of corporate America rushing to show it’s on top of a new, and clearly important tech trend.

And it’s clear why.

Three researchers recently concluded in an NBER paper: “ChatGPT represents an important shock to corporate valuations.”

They calculated that firms with high exposure to AI earned daily excess returns that were 0.4% higher than firms with lower exposure, after the release of the chatbot.

A former OpenAI researcher, Paul Christiano, said society was at “maybe a 10-20% chance of AI takeover, [with] many [or] most humans dead.”

Here are the signs that ChatGPT was a black swan event — an unforeseen, rare occurrence that has far-reaching impacts and, in hindsight, looks inevitable.

1. AI has come for jobs

The doomy tech prophecy that robots could eventually replace humans is starting to come true.

In March, an early analysis from Goldman Sachs found that generative AI could significantly disrupt the labor market, affecting around 300 million jobs globally. Coding jobs were predicted to be particularly vulnerable as tech layoffs continue to savage the industry. September analysis by GitHub, the code repository owned by Microsoft, found that developers using its AI Copilot tool to aid their coding were 55% faster than those who didn’t.

Now CEOs are beginning to say the quiet part out loud.

Arvind Krishna, chief executive of IBM, said in May that the company would slow or suspend hiring for roles that might be replaced by AI, estimating that 7,800 jobs could be impacted, mostly comprising back-office roles.

Mustafa Suleyman, a cofounder of Google DeepMind, recently called for universal basic income to support what he predicted as the “serious numbers of losers” of jobs to AI.

As Insider’s Hasan Chowdhury noted, AI may not directly replace jobs across the board, but it will enable companies to cut costs by using the technology to make existing workers more efficient and productive.

2. ChatGPT has changed education and training forever

Students, along with some teachers, were among the early users of ChatGPT when they realized its potential to produce essays and help with assignments. 

Cue plagiarism, false accusations of cheating from educators, and a new atmosphere of distrust between students and professors navigating a post-ChatGPT world.

Beyond school, large language models have the capacity to disrupt training even for seemingly elitist careers, like medicine. One paper, which had not been peer-reviewed at the time of writing, indicated that ChatGPT was capable of passing all three parts of the United States medical licensing examination. Another experiment found medical researchers preferred ChatGPT to physicians because it appeared to be more empathetic. Human doctors have concluded the bot won’t replace them any time soon but might have a few things to teach them about their bedside manner. This is a pretty astonishing prospect for an algorithm.

At a corporate level, surging student interest in ChatGPT saw education companies’ stocks get hammered earlier in May.

Chegg, which offers online help for students’ homework, saw its stock price almost cut in half after CEO Dan Rosenzweig told investors the company had seen a “significant spike in student interest ChatGPT” that was “having an impact on our new customer growth.”

“We see this one as a real, transformational change,” he during its Q1 2023 earnings call, comparing the advancements in AI to other recent technologies such as bitcoin payments. “We’re betting very big on the fact that people are going to need to learn how to use these things.”

Fellow digital learning firm, Pearson, and virtual language-learning company Duolingo also saw their share prices plummet.

3. ChatGPT single-handedly blew up Big Tech

Big tech companies have, on the face of it, failed to talk about big, ambitious ideas in a tangible way over the last five years.

Self-driving cars have stalled; internet balloons failed to take off; even opening brick-and-mortar stores appeared too difficult a challenge.

ChatGPT lit a fire under these behemoths, with Meta, Amazon, and Google all racing desperately to talk about AI publicly after its release, and Microsoft’s investment in OpenAI.

In the wake of ChatGPT’s launch, Google reportedly declared a “code-red” and has since been pouring resources into AI to try and keep pace. It has also had to pivot quickly in the way it talks about artificial intelligence, moving away from high-minded ethics warnings to actually putting out products.

One is a revamped version of Google search powered by its new chatbot Bard, a direct response to OpenAI’s ChatGPT. The firm will also integrate the tech across Google Workspace, marking the biggest innovations to its core products in years. 

Keen not to be left behind, Meta has also been emphasizing its AI credentials.

In February, the company introduced researchers to LLaMA, a large language model similar to OpenAI’s GPT-4. A month later, CEO Mark Zuckerberg said that the company’s “single largest investment is in advancing AI.”

Internally, Zuckerberg has reportedly become so invested in AI that analysts have expressed concern about how much the company is spending on the technology. Meta’s lack of consumer-facing AI products, however, has made it less visible in the space.

Amazon, meanwhile, is working on implementing ChatGPT-like features into a secret new home robot, Insider’s Eugene Kim reported.

4. Nations want to rein in the spread of AI

With the threat of AI displacing jobs and even defaming people, regulators are watching how private companies roll out AI closely.

The EU is making early strides towards banning uses that pose an “unacceptable risk” while the Biden administration has been meeting with major players in the industry. ChatGPT was briefly banned by Italian regulators.

Regulators may have been spurred on by a growing chorus of warnings about the tech’s potential. In the UK, a government official met with Geoffrey Hinton, the ex-Googler dubbed the “Godfather of AI.” Hinton quit Google earlier in 2023 in order to speak candidly about the risks posed by AI.

Hinton’s warnings, first published in the New York Times, followed similar concerns raised in an open letter backed by other AI heavyweights including Yoshua Bengio and Stuart Russell.

Even OpenAI CEO Sam Altman, quizzed by US lawmakers in May, warned that personalized disinformation targeted at undecided voters was a personal fear of his. 

“I worry that as the models get better and better, the users can have less and less of their own discriminating thought process,” Altman said.