Artificial Intelligence: Everything Everywhere All At Once

Excerpt from Yardeni Research Morning Briefing (March 23, 2023)

Jackie Doherty and Ed Yardeni

The announcements have come fast and furiously. Anyone who has anything to do with AI is broadcasting it to the world loudly. Chip manufacturers, software providers, social media companies, and the average Joe all are talking about how they’re harnessing the power of AI to work faster and smarter. This week’s news has been dominated by Nvidia’s impressive AI offerings unveiled at its software developer conference and Google’s rollout of Bard. Dare we suggest that it feels like the beginning of what will become the next big bubble?

This week has also brought the latest AI fake: A picture of former president Donald Trump resisting police arrest, an event that has not occurred but seems plausible given that a grand jury is considering whether to indict Trump over alleged hush-money payments to Stormy Daniels during the 2016 presidential campaign.

The fake picture was generated by Elliott Higgins, founder of Bellingcat, an independent international collective of researchers, investigators, and citizen journalists, a March 21 ARS Technica article reported. He used AI engine Midjourney V5 to generate the image he initially posted on Twitter. Even though Twitter prohibits users from sharing share synthetic or manipulated media, the picture has gone viral.

Here are some of the latest developments in the expanding world of AI:

(1) Nvidia wows the crowds. In the AI space, Nvidia has been investors’ darling; they’ve bid its shares up a steep 79.3% ytd through Tuesday’s close. The tech company held a software developer conference this week highlighting chips with various AI capabilities and revealing its DGX cloud service. Through DGX, companies will rent space on supercomputers that use Nvidia chips to develop AI technologies for the price of $37,000 a month, a March 21 Reuters article reported. The company is working with cloud providers Oracle, Microsoft, and Alphabet.

Nvidia also introduced three new services that companies can use to develop their own AI applications trained on their own data. NeMo generates language, Picasso can produce images and videos, and BioNeMo allows players in the life-science industry to “generate scientific texts using biological data,” a March 21 Venture Beat article explained.

(2) Google’s Bard now available. Google opened public access in the US and UK to Bard, its ChatGPT alternative. “Bard is designed to respond to written prompts using information sourced from websites such as Wikipedia and can handle follow-up questions in a conversational manner,” a March 21 WSJ article reported. Google still considers Bard an “early experiment” and posts the following disconcerting message at the bottom of its site: “Bard may display inaccurate or offensive information that doesn’t represent Google’s views.”

Meanwhile, OpenAI rolled out a new and improved version of ChatGPT, GPT-4, which will be used in Microsoft’s search engine, Bing. And not to be left behind is China’s search engine company Baidu, which introduced its chatbot Ernie earlier this month; but the lack of a live demonstration disappointed some observers.

(3) Software gets an AI facelift. Software companies are racing to infuse their existing software products with new AI capabilities. Microsoft is using ChatGPT throughout its enterprise software products—Word, Excel, and Windows—as well as its Bing search engine.

Business Chat is a new feature that can access information across Microsoft’s office products. For example, an employee could ask Business Chat for a customer update, and a response will be generated using information found in emails, meeting notes, and other documents, a March 16 NYT article explained. Copilot is a service that can write as guided in a Word document.

Google also plans to update Gmail and Google Docs with AI, allowing them to draft emails and other documents from simple written prompts. Google also introduced the Generative AI App Builder, so software developers can create their own chatbots for business and governments, just as developers created apps for the iPhone.

Adobe and Salesforce have introduced AI tools into their software products. Roblox envisions AI automating the basic coding tasks involved with creating a video game so that the programmer can focus on creative work. And C3AI was created to offer AI applications to companies.

(4) Consumers and companies get converted. Consumers are taking to ChatGPT like a fish takes to water. Who wouldn’t want a way to save time and look smart (assuming that ChatGPT’s answers are correct)? Software engineers appear to be big fans of AI, which helps them write code. Lawyers are using it to summarize case law, and workers are using it to rewrite drafts to sound more informative or concise, a March 22 WSJ article reported. Conversely, companies are scrambling to ensure that employees don’t reveal any trade secrets or produce material with incorrect information.

Investment bankers and investors might want to give AI a chance, too. PitchBook has launched VC Exit Predictor, a program that uses PitchBook data about the venture capital industry to forecast a startup’s growth prospects, a March 20 TechCrunch article reported. “It generates a score on the probability that it’ll be acquired, go public or not exit due to becoming self-sustaining or experiencing any event (e.g. bankruptcy) that prevents an exit,” the article explained. Developed using a machine learning algorithm, the program was 75% accurate when tested using historical data.

More than 75% of venture capital and early-stage investor executive reviews will use AI and data analytics by 2025, according to research firm Gartner. Venture capital firms SignalFire, EQT Ventures, and Nauta Capital already are using AI to flag potential winning investments. There are concerns that programs based on historical data may be disadvantageous to companies led by women or minorities.

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