The Most Important 11 Words of the AI Boom

When it comes to AI, you can’t forget these 11 words...

Over the past few weeks, I’ve been writing about where we are with AI today, and where it’s going...

I written about how to profit from AI. And why you can’t ignore what’s happening, even if you don’t plan on buying an AI stock.

But here’s the overarching message I want you to remember if nothing else:

This is the WORST artificial intelligence is ever going to be.

There are all kinds of problems with ChatGPT, the new AI tool taking the world by storm. The chatbot, which can have human-like conversations, became the fastest-growing product in history... gaining 100 million users in just two months.

But it’s politically motivated. It talks like a San Francisco liberal... and is often flat-out wrong. To some, it may seem like a silly toy.

None of this matters. The important thing to understand is right now, ChatGPT is the worst it will ever be. These systems only improve over time. And the speed at which these advancements are happening right now is truly incredible...

We saw how rapidly AI systems are improving in the past few weeks.

OpenAI, the creator of ChatGPT, debuted GPT-4 last month. It blows away the first ChatGPT. Researchers put both systems through a gauntlet of real-world tests, including the bar, SAT math, and GRE business school exams.

ChatGPT barely passed most of these tests. GPT-4 blows them out of the water. It scored in the top 10% on the bar exam. That’s remarkable when you consider the chatbot didn’t undergo any specific training.

Bryan Caplan, professor of economics at George Mason University, put ChatGPT through its paces in December. It could only muster a D grade on his midterm.

Not only did GPT-4 score an A on Caplan’s new exam, but it achieved the highest grade of any student!

GPT-4 is the real deal. It’s not your father’s clunky AI.

OpenAI’s new system comes with new capabilities, too. For example, it can understand “context” in images, as shown in this example:

Source: OpenAI

Using GPT-3, UK-based startup DoNotPay built a chatbot to negotiate fines like unwarranted parking tickets for customers. It kind of worked. But the bot often needed manual intervention.

DoNotPay adopted GPT-4 and achieved a major milestone. The bot “talked” to Comcast’s online customer service and managed to save someone $120 on their broadband bill. According to the startup, it’s the first time a bill has been negotiated purely by AI.

How is GPT-4 so superior to its predecessor?

My colleague Chris Wood and I recently talked about the new “AI law” in this RiskHedge Report. In short, with every 10X increase in the amount of data you feed into an AI system, its quality doubles. So to boost AI performance, researchers are using ever-greater amounts of data.

When it comes to AI, bigger is better.

Researchers didn’t stuff 10X more data into GPT-4. GPT-3 has 175 billion parameters, while GPT-4 has 100 trillion parameters—a roughly 500X increase.

Other AI tools are advancing rapidly, too.

Take image generator Midjourney, for example. Midjourney V1 debuted less than a year ago. Look at how much better V5 is at creating photorealistic images of Mr. Bean:

Source: Wired

AI isn’t some far-off tech with the potential to change the world in 10 years. Real breakthroughs are happening now.

GitHub Copilot is an autocomplete tool for coders built on OpenAI’s tech. Instead of humans having to write every line of code themselves, the software predicts what they’re trying to code and offers suggestions.

Coders using Copilot finished tasks in 55% less time, on average. Imagine a tool which could boost your productivity by 50%. That’s a total game-changer.

I’m predicting there will soon be “Copilots” for lawyers, accountants, doctors, and everyone else. Vast fortunes will be created by companies harnessing this powerful new technology.

Here’s a useful analogy on how to profit from AI…

Refrigeration was one of the most disruptive inventions of the 20th century. Being able to preserve food totally changed how Americans ate and cooked.

But do you know who invented the refrigerator? It was a company out of Detroit, Michigan, called Kelvinator, which you’ve probably never heard of.

Investing in Kelvinator wasn’t the best way to make money from the rise of refrigeration.

Instead, you wanted to bet on upstarts harnessing this powerful new technology—like Coca-Cola (KO), which built a $270 billion empire making cold, refrigerated drinks.

One way to play the AI trend is by investing in companies powering the AI revolution, like Nvidia (NVDA) with its specialized GPU computer chips.

You can also invest in firms currently using this breakthrough tech to disrupt massive, important industries.

To get more ideas like this sent straight to your inbox every Monday, Wednesday, and Friday, make sure to sign up for The RiskHedge Report, a free investment letter focused on profiting from disruption.

Related: How I Learned To Stop Worrying and Love AI