Many people have been seeing the tool ChatGPT blow up over the last few weeks. It’s an exciting time for generative AI companies.
In seeing all the excitement over ChatGPT, many investors wonder whether it’s possible to buy stock in GPT-3, OpenAI, or ChatGPT itself.
The answer is that you cannot buy stock in ChatGPT or its parent company OpenAI directly. Buying stock in Microsoft is likely the best way to get direct exposure in your investment portfolio to ChatGPT and other OpenAI tools, but consult an advisor first.
Let’s explore options for investing in ChatGPT, the value of OpenAI, and more.
How can you buy ChatGPT stock?
ChatGPT is not a company. It is a tool; it was created by OpenAI.
OpenAI, as the name suggests, was originally created as a nonprofit. Its mission was to explore new uses for AI. It later became a for-profit company.
OpenAI is a privately held company. That means that unless you’re in a giant venture fund, you probably won’t be able to invest in OpenAI directly. The company is not listed on the New York Stock Exchange or any other stock exchange, and any investments made in it are handled privately.
This means that it’s not possible to invest in ChatGPT directly. There is, however, a way to invest in one public company that has major exposure to ChatGPT.
How can I buy stock in OpenAI?
Again, OpenAI is a private company. Although there’s a chance it could go public in the future with an IPO, OpenAI is currently not available for public investment. Unless you have billions of dollars to invest, you’re probably not going to be able to buy OpenAI stock anytime soon!
The Public Company Connected to OpenAI
Although you can’t invest in ChatGPT stock directly, there is one way to get some exposure in your investment portfolio to OpenAI, ChatGPT, GPT-3.5, and other advanced technologies.
From the beginning of OpenAI’s journey, Microsoft has been a major backer of the company and initially invested 1 billion into OpenAI to help develop innovative technologies like ChatGPT and DALL-E. That investment gave Microsoft the exclusive right to commercialize OpenAI’s GPT-3 technologies.
Microsoft reportedly continues to invest billions more, quietly, into OpenAI. The main goal was likely to help OpenAI cover the exorbitant cost of running ChatGPT for free.
We estimate that OpenAI is currently spending at least $200,000 daily to keep the system up and running, and struggles to do so even with Microsoft’s backing.
Microsoft’s Connection to OpenAI
Beyond having exposure to OpenAI’s technologies through its investment, Microsoft also stands to gain quite a lot as OpenAI’s processor-intensive technologies consume ever more computing power.
ChatGPT and other OpenAI technologies are reportedly running on Microsoft’s Azure cloud computing service, and Microsoft recently announced that Azure is now the exclusive cloud computing provider for OpenAI. That means that as OpenAI’s processor-intensive technologies consume more computing power, the company will be buying all that computing power from Microsoft.
That would be a big source of revenue for Microsoft and a way for it to compete with Amazon’s cloud platform.
Likewise, there have been reports that Microsoft is planning to integrate OpenAI technologies into its lagging Bing search engine. If it moves ahead with this plan, that could make Bing far more competitive with Google, the dominant player in the search industry.
In short, there are three ways, at least, that Microsoft can benefit from its investments in OpenAI.
- As the exclusive commercial licensee of OpenAI’s technologies, Microsoft could make revenue directly from its investment as more companies use OpenAI tech and pay for that usage.
- Because OpenAI is reportedly buying massive amounts of cloud computing power, Microsoft could profit handsomely as the company continues to purchase that computing power from Azure.
- If ChatGPT and other technologies from OpenAI make Microsoft’s Bing search engine more competitive with Google, Microsoft could capture a big swath of the lucrative search marketing industry.
Investing in OpenAI through Microsoft
That means that the one way that public investors could get access to OpenAI and its technologies is by investing in Microsoft.
To be clear, this is not a direct investment in OpenAI. There are plenty of ways that Microsoft stock could gain or lose value independently of OpenAI’s performance. Microsoft could still lose money, despite OpenAI doing great, if other parts of Microsoft lag.
Of course, investing always involves substantial risk. The question of whether you should invest in Microsoft to get access to ChatGPT or OpenAI exposure is one you should ask your professional investment advisor. Nothing in here is meant to constitute investment advice. You should never invest more than you could afford to lose, especially when you’re making investments based on an emerging technology like ChatGPT.
Also, keep in the mind the relative scale of the two companies. Microsoft has a market capitalization of 1.85 trillion, as I write this. OpenAI is valued at around $29 billion. That means that OpenAI is still just a tiny sliver of the market cap of Microsoft.
No matter how well OpenAI does, it will take some time for the small company’s revenue to have a big impact on its benefactor’s bottom line.
That said, if OpenAI could help turbocharge Microsoft’s other businesses or create an entirely new sector of Microsoft dominance, it could help to boost its parent company’s revenue and competitiveness, even if OpenAI itself isn’t immediately profitable.
Why Doesn’t Microsoft Just Buy OpenAI?
If OpenAI and ChatGPT are so valuable, why doesn’t Microsoft just acquire the company?
It’s possible that Microsoft is keeping OpenAI as a separate entity until the legal and ethical questions around AI are resolved. As pending litigation gets resolved, and we get more answers as to the legal status of AI in the United States, it’s possible that Microsoft or another company could acquire OpenAI outright in the future.
Because OpenAI, the creator of ChatGPT, is a privately held company, there is no way that you can invest directly in it at the moment.
That said, Microsoft is ChatGPT’s biggest backer and the public company that stands to gain the most if OpenAI’s technologies continue to take off.
Although the value of OpenAI is still a tiny sliver of Microsoft’s overall business, its exclusive ability to monetize OpenAI could pay off substantially in the years ahead.
Nothing is guaranteed, though. Other aspects of Microsoft’s business, such as competition-related regulatory issues, could easily damage the company’s stock even if OpenAI performs well.
Discuss all your investment options with a professional advisor before making decisions. You can ask them if it would be prudent for you personally to get some exposure to emerging AI technologies by investing in Microsoft.
If they feel that it’s a good investment for you, Microsoft is publicly traded under the ticker symbol MSFT.
In the future, it’s likely that more generative AI companies will emerge and reach public status. As that happens, there will be ever more opportunities to invest in these exciting technologies.