Foreign What's up guys! and welcome back to Wall Street Millennial On this channel, we cover everything related to stocks and investing. On November 30th, 2022, a new Ai-powered chat bot called Chat GPT took the World by storm, garnering more than 1 million users within the first week of launch. It's a free to use online tool which can create text outputs based on prompts you give it and you can ask it to create pretty much anything you want. Here it is making a Shakespearean sonnet about hamburgers.

While Chat GPT was only released recently, the technology behind it has been in the works for years by the company. Open AI Open AI was founded as a non-profit organization in 2015 by a Consortium of donors including Elon Musk. The idea behind the Venture was to research ways to develop artificial intelligence responsibly in a way that would provide the most benefit for Humanity. Given the tremendous success of his AI creation, you'd expect Musk to be happy, but this is not the case.

Shortly after Musk took over as CEO of Twitter, he banned Openai from accessing the company's database of tweets. even going back to 2020. Musk has been openly criticizing the company on Twitter saying that Open AI is no longer open and has been captured by Microsoft. So what is going on? Why is Musk so critical of an organization that he co-founded While Musk co-founded Open AI, He has not been operationally involved with them since he stepped down from the organization's board of directors in 2018..

Openai received a one billion dollar investment from Microsoft to develop new AI technology that Microsoft will commercialize. But how is this possible? Openai was a non-profit organization. How could they receive a one billion dollar investment from Microsoft which is for profit? The key is that Openai was a non-profit organization in the past tense. Before securing the investment from Microsoft, Open AI transitioned from a non-profit organization to a capped profit organization which is a corporate structure that they invent.

The idea is that investors are allowed to receive some return on investment, but this will be capped at some predetermined limit. Any profit beyond the limit will go to funding Open Ai's mission to responsibly develop AI to benefit. Humanity At first, this sounds like a good compromise. Private investment will give Openai the capital and needs to continue developing its technology while allowing it to maintain its original Mission But when you look at the details, it's not a compromise at all.

The returns for the first round of investors is capped at 100 times their original investment. This means that they will have to generate 100 billion dollars of profit to pay back Microsoft With such a high rate of return, The cap is basically a farce and Open AI is no different from any other for-profit company. Microsoft has already started selling Chat Gpt's technology to Enterprise customers on its Azure cloud computing platform. It appears to be working out pretty well for them as they are reportedly and talks to pump even more money into the formerly non-profit organization.

Musk has long feared the danger that artificial intelligence could pose to humanity once computers become smarter than people. He created Openai as a non-profit focused on maximizing the benefit and safety of humanity, not maximizing profit, but Open. AI almost immediately abandoned their non-profit status in the pursuit of money while chat GPT may look like a harmless party gimmick today. It, as well as other technologies that Openai is rolling out have the potential to drastically reshape our economy.

And Society In this video, we'll look at how Microsoft was able to effectively use Serp control of Open Ai and why Elon Musk is so worried about it. Open AI was founded in 2015 by Elon Musk CEO of Tesla Sam Altman the former president of the Venture Capital firm Y Combinator, as well as a few other wealthy technologists. Here's an interview with Musk from 2016 talking about Open Ai's Mission shortly after it was founded. The best of the available alternatives that I can come up with and maybe somebody else can come up with a better approach.

A better outcome is that we achieve democratization of AI technology meaning that no one company or a small set of individuals has control over Advanced AI Technology I Think that that's very dangerous. It's not just I Think that the risk is that the AI would develop all of its own right off the bat. I Think it's more. That's the concern is that some someone um may use it in a way that is bad.

Or and even if they weren't going to use it in a way that's bad that somebody could take it from them and use it in a way that's bad that that I think is quite a big danger. So I think we must have democratization of AI technology and make it widely available. Um, and that's you know the reason that obviously uh, you mean the rest of the team you know created Openai um was to help uh with the democrators help help spread out AI technology so it doesn't get concentrated in the hands of a few. Musk is a big believer in the power of artificial intelligence to revolutionize our economies and societies.

Perhaps his most important project at Tesla is the development of autonomous vehicles which rely on AI technology. At the same time, he is very concerned about the dangers that AI can pose to humanity if it ends up in the wrong hands. That's why he co-founded Openai as a non-profit organization meant to democratize AI technology and prevent it from being controlled by any single entity. It was initially structured as a non-profit and the founding donors poured in tens of millions of dollars to get the organization up and running.

Because it was a non-profit the original Founders had no economic stake in the organization and had no way of receiving any profits from The Venture It was done purely for altruistic reasons to promote the responsible development of AI in a way that would maximize the benefit and minimize the risk to humanity. Sam Oldman became the CEO of Open AI responsible for day-to-day operations Elon Musk Already had his hands full being CEO of Tesla and SpaceX so he sat on the board of directors, but had only limited operational involvement. Artificial intelligence is nothing new. The first Research into what could be considered modern AI started at Dartmouth University in the 1950s.

At its core, AI is defined by the perceiving, synthesizing and inferring of information by machines. AI has already found real world applications. For example, when you're scrolling through your recommendation list on Netflix there's an AI system on the back end which decides which TV shows and movies you're most likely to enjoy. While Netflix recommendations may not seem revolutionary, it would not be possible without AI.

Had it not been for AI, they would need to hire hundreds of thousands of human workers to curate unique recommendations lists for each Netflix subscriber. Needless to say, this would be infeasible. Of course, content, recommendations and other similar use cases are a long way off in the types of dystopian risks that Musk is concerned about. This is because these more primitive forms of AI were created to fulfill a very specific task and have no ability to do anything else.

Long story story short, they are not creative. Openai was trying to develop what they call artificial general intelligence. This refers to a computer being able to do any tasks that a human can do. The first thing that Openai tried to develop was a human-like natural language generator which can understand and create human-written language.

This would eventually become Chat GPT This technology has the potential to replace human customer service functions by reading customer messages and responding to them autonomously. It would have the potential to replace journalists and other writers by being able to create articles in other documents using AI For an AI To gain human level intelligence, it has to learn from humans. In the case of Open Ai's Chadbot, they trained it by scrolling through billions of web pages on Wikipedia Twitter and other websites. The Internet today contains millions of times more information than any human could ever remember.

But a computer can save all this data almost Without Limits. But what's even more powerful is the Ai's ability to understand human speech patterns. By observing billions of interactions between real people on the internet, the AI gains an understanding of how humans communicate and can thus replicate it. The problem is all of this costs a lot of money in order to process the billions of pages worth of data.

Open AI needs an army of supercomputers working 24 7.. this would cost tens if not hundreds of millions of dollars. While the company did have Rich donors including Elon Musk There is a limit to how much money they were willing to put in with zero Prospect of ever making a profit. They received another blow in 2018 when Elon Musk stepped down from the board of directors in fear of potential conflicts of interest with the automaker's own AI research.

While Elon Musk was not able to provide the adequate level of funding Microsoft was. In 2019, the tech giant announced a one billion dollar Strategic investment into Open AI which included giving them access to the super computing power on Microsoft's Azure Cloud platform. But there was a catch: Microsoft has a fiduciary responsibility to maximize shareholder value, so they weren't giving this money for free. in order to receive this investment from Microsoft, Openai had to transition from a non-profit to a so-called Capt profit organization.

But as we discussed earlier, this cap is a 100 times increase over the initial 1 billion dollar investment. So the profit cap is basically a farce. Openai is now a for-profit company, with Microsoft being its largest shareholder and strategic partner by far. With a combination of many years of research from Open Ai's employees along with Microsoft's vast supercomputer Network, the company was able to achieve multiple breakthroughs in artificial general intelligence so far.

This has culminated in three main products: firstly, the AI Chatbot chat GPT, secondly the AI Image Creation tool Dolly 2, and finally Codex which writes computer code autonomously using Ai And the results are extremely impressive as a marketing gimmick, Openai has made both Chat GPT and Dali 2 available to the public for free for now, although we can likely expect them to start charging money for it in the near future. With Dolly 2, you can input whatever painting you wanted to draw, no matter how ridiculous it may seem. For example, here, it has created an oil painting of a sloth astronaut navigating the cosmos within a few seconds. This is something that would take a skilled painter many hours, if not days to complete by hand.

Chad Gbt is perhaps even more impressive here. I Gave it the annual revenue data for Apple for the past decade and asked it to create computer code to make an animated line chart. Showing this in the first iteration, it worked, but it wasn't exactly like I wanted. It did create an animated line chart, but the X and Y axes adjusted with each frame in a way that made it difficult to read.

This is where the most impressive part about Chat Gbt comes into play. It remembers the previous outputs that has given you, so you can tell it to make adjustments. I Told to change the above code so that both the X and Y axes are fixed. It rewrote the code to do just that and created the final output that I wanted here.

I Was able to create this animated line chart without needing to write a single line of code on my own I only used regular human language to tell it what to do with this tool. Somebody with zero coding experience can create things they would not be able to do otherwise. Chat GPT can also be used to write articles and answer questions. Pretty much whatever you ask it to do, it can give you an output that looks like it could have been written by a human.

However, there is one major limitation. Its training data only goes up to 2021, so it is not knowledgeable about current events. However, this limitation will likely be solved with the paid version of the service, which is expected to launch soon. Microsoft is already starting to sell Open AI Based Services to its Enterprise customers in conjunction with their Azure Cloud Computing platform.

Early use cases include creating text for marketing documents, quickly reading through, and summarizing legal documents, responding to customer inquiries, and writing computer code, just to name a few. The potential for disruption of this technology is difficult to overstate. There are millions of people who work in the journalism and copywriting industries. Many simple writing tasks such as email marketing materials could be done with Chat Gpt's AI technology.

A lot of journalistic Articles could be written by AI as well. Software Engineers could also see their jobs at risk. Codex could serve as a force multiplier, allowing one engineer to write a computer code that would previously have required a team of 10 people. However, from a societal perspective, the potential unemployment may be the least of our concerns.

The thing that makes Chat GPT so powerful is the fact that the computer generated output is indistinguishable from that of a real human. But this also makes it incredibly dangerous. When you're reading an article online or any piece of text for that matter, you may have no way of knowing if it was written by a human or a computer. If you've ever looked into the abyss that is the YouTube comments section, especially on crypto related videos.

You're probably familiar with the massive quantity of bots promoting various crypto scams. For the most part, these Bots are unsophisticated and it's pretty easy to tell that it wasn't a real human leaving each comment. However, if the scammers could use tools like Chat Gbt, it may become far more difficult to differentiate Bots from humans. Companies could also use Chat GPT to generate fake hype for their products.

On forums such as Reddit Political and ideological actors can create massive amounts of propaganda articles to manipulate public opinion. Microsoft and Openai both claim that they'll put in safeguards to prevent customers from abusing this technology for deceptive purposes. Zuckerberg Has been saying that Facebook takes user privacy seriously since at least 2005. What we can do with that? But we're obviously like, really sensitive to people's privacy and we all know how that turned out.

In the end, there will always be a gray area of what is acceptable and what is not. As a profit maximizing company, Microsoft has a duty to its shareholders to err on the side of laying their customers do whatever they want. Employees are incentivized by performance-based bonuses and career advancements. Assigning deals with customers brings in money.

Agonizing over complicated ethical questions does not. Elon Musk Knew this could be a problem from the beginning. In fact, this was his entire purpose of founding Openai as a non-profit This way, nobody would be forced to make the difficult trade-offs between profit and ethics. That's why Elon Musk is so upset Open AI was started as open source and non-profit Neither are still true today.

Regardless of his original intentions, Musk created a monster which he can no longer control. All right guys, that wraps it up for this video. What do you think about Open? AI Was it justified in turning into a for-profit company? Let us know in the comments section below. As always, thank you so much for watching and we'll see in the next one.

Wall Street Millennial Signing out.