Generative AI leads the charge in AI’s second wave as the newest venture capital darling. Startups are back to high valuations despite economic uncertainty, and improvements in technology are poised to transform how content and creative teams function across industries.

Chat GPT’s public release, in particular, sparked an explosion in generative AI adoption and an even larger conversation around the ethics and ramifications of tech. And, after having reached a million users at lightning speed, faster than many other breakthrough apps of the past five years, ChatGPT is poised to continue driving generative AI growth in 2023. 

Here, we unpack what you need to know about ChatGPT and the rise of generative AI. 

ChatGPT and generative AI explained

Generative AI is artificial intelligence that creates content from simple prompts and context. The technology requires user prompts—a short string of words or phrases, for instance—to produce everything from text and code, to music and 3D objects. 

Generative AI models simulate how we think by relying on algorithms that “learn” with each use. They start with millions of labeled pictures, text, or other media, and gradually identify patterns that allow them to understand and create content independently.

Chat GPT, which stands for generative pretrained transformer, is an AI model built by OpenAI. Users provide prompts, questions, or requests, after which Chat GPT will provide an answer in well-structured responses in varying tones or formats (i.e. code, poetry, or first-person narrative).  

Business timeline of OpenAI
OpenAI accelerated the release of new models following its shift into a capped-profit company in 2019, which let it raise more capital.

ChatGPT market stats

Founded in 2015 as a nonprofit, OpenAI accelerated the release of new models following its shift into a capped-profit company in 2019, which let it raise more capital. Its biggest backer soon became Microsoft, which has invested over $10 billion since March 2019, including credits for computing power via Azure. Microsoft will reportedly invest another $10 billion, valuing OpenAI at $29 billion. 

ChatGPT quickly gained 1 million users in five days, following its release on November 30, 2022 as a proof of concept. Its most recent update, GPT-4, is a large multimodal AI model that surpasses its predecessor’s capabilities, and is also more likely to produce factual responses. In fact, OpenAI claims that the model passed a simulated bar exam, scoring around the top 10% of test takers, compared with GPT-3.5, which scored in the bottom 10%.

ChatGPT trends and use cases

Generative AI is triggering disruption in businesses in nearly every sector. In the next three to five years, Insider Intelligence analysts predict that many jobs will adapt to revolve around prompting and supervising AI rather than producing creative.

In the creator economy, many brands are experimenting with ChatGPT to develop creative briefs, text, video thumbnails, and images. The technology is incapable of generating original ideas because it crowdsources and synthesizes information that has already been published online, so, still, a human touch is essential to create innovative work.  

In the financial services space, are testing ChatGPT’s impact with process automation, fraud defense, and even product development. Generative AI can produce synthetic data to augment the limited but real datasets, enabling it to better anticipate risks and identify suspicious activity.

ChatGPT competitors

OpenAI is the best-known generative AI company, but it’s not the only one. The industry has two types of players: those that provide AI infrastructure, including cloud computing and core engines, and those that adapt models for specific purposes through applications.

Google and Microsoft both have leading search engines, cloud services, and productivity tools—and both are all in on AI. Startups, on the other hand, such as Anthropic, Stability AI, Midjourney, AI21 Labs, and Cohere have built some of the more advanced models. A battle looms.

  • Google Bard
  • DeepMind Sparrow 
  • Meta BlenderBot 
  • Amazon Web Services 
  • Microsoft Bing 
  • Baidu Ernie 

Whats next for ChatGPT and generative AI? 

Chat Gpt is a potential game-changer for fast movers and a potential risk for those that fail to prepare. By understanding the most promising use cases and preparing for generative AI’s rise, businesses can gain a competitive edge and ensure they are delivering the best possible experience for their customers. 

This analysis is part of Insider Intelligence’s ChatGPT and Generative AI report, which contains more insights and data to help guide your business strategies. To preview the full report, click here.