ChatGPT: This is Only the Beginning

With all the talks and hoo-ha over ChatGPT since the end of last year, what is particularly interesting and yet, terrifying, is that ChatGPT is just the beginning. New inventions will be built and developed on top of this generative AI and the output will be a much-improved version, or better still, a whole new advanced tool. Things are going to get more disruptive but the extent of the disruption and how it will manifest will be hard to predict at the moment, at least for now.

This phenomenon is similar to the early days of the internet, when the hype and potential of the internet was highly regarded, but many were unprepared, resulting in the dot-com bubble burst in the 2000. The dot-com bubble was a period of speculative investment in internet-based companies during the late 1990s and early 2000s where many investors believed that these companies had the potential to generate great profits and the stock prices of many dot-com companies soared to incredible heights.

Between 1995 and its peak in March 2000, the Nasdaq Composite stock market index rose 400% (from under 1,000 to more than 5,000), only to fall 78% from its peak by October 2002, resulting in a loss of billions of dollars. The dot-com bubble was primarily caused by a combination of speculative investment, unrealistic expectations about the potential of internet-based companies and a lack of fundamental business sense in many of these companies. The bubble ultimately burst when investors realized that many of these companies were not making enough money to justify their high stock prices.

The NASDAQ Composite index spiked in the late 1990s and then fell sharply as a result of the dot-com bubble

Source: https://en.wikipedia.org/wiki/Nasdaq_Composite

Although the dot-com bubble and the disruption from generative AI (ChatGPT) are two distinct phenomena that occurred in different industries and at different times, there are some similarities between these two that can be useful for reference and also in understanding the impact of disruptive technologies on the markets and industries.

One similarity that can be found is that both the dot-com bubble and the rise of ChatGPT from generative AI were characterized by high levels of hype and speculation. During the dot-com bubble, investors invested huge amounts of money into internet-based companies without a clear understanding of their business models or revenue potential. Similarly, the development of generative AI has led to a lot of hype about the potential of these technologies to transform industries, and similarly, without a clear understanding of the practical and actual applications or limitations of these technologies.

Another similarity is that both the dot-com bubble and generative AI are disrupting traditional business models and creating new opportunities for innovation. The rise of the internet and e-commerce during the dot-com bubble fundamentally changed the way many industries operated, leading to the creation of new business models and the emergence of new players in the market. Likewise, the development of generative AI is likely to disrupt many industries particularly the creative industry, such as art, music, and content creation, by enabling new forms of creativity and innovation easily done by generative AI tools.

In summary, while the dot-com bubble and the disruption from generative AI are distinct phenomena, they both highlight the importance of understanding the impact of new technologies on markets and industries. Generative AI such as ChatGPT, like the dot-com era, has a massive power to change the industries and even the world as we know it when it matures in time. Therefore, it is imperative that we learn from the past to better equip ourselves to avoid making the same mistake. By learning from the lessons of the dot-com bubble, we can approach the development of generative AI in a more measured and strategic way, and avoid some of the pitfalls of hype and speculation that characterized the dot-com era. 

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