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“As long as we enjoy it, we’ll do it. ‘Cause we enjoyed it before we made any money.” – George Harrison, 2/7/1964
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Much like Chat GPT has rocked the way people gather and consume information, 59 years ago today, the music scene in the United States was changed forever as John, Paul, George, and Ringo touched down at Kennedy airport for the first time. The rest is history. When the Beatles appeared on the Ed Sullivan Show less than two weeks later, around 40% of the US population watched. Everywhere the band went they were swarmed by screaming (nearly all female teens) fans. For the imprint the Beatles made on both the music industry and pop culture, it’s hard to believe that within six years of first setting foot on US soil the band was no more. The Beatles’ candle may not have burned for long, but the movement they sparked still shines today.
A single event watched simultaneously on TV by 40% of the US population will never be duplicated again, but the stampede of Chat GPT into the mainstream is an event unrivaled by any other product in history. According to a study by UBS, Chat GPT reached 100 million monthly active users in the span of two months putting it years ahead of Google Translate (78 months), Uber (70 months), Spotify (55 months), and Instagram (30 months). Even TikTok took nine months to reach that milestone! Chat GPT is to consumer tech what the Beatles were to music. It will leave a permanent impact on society in terms of how people gather, produce, and consume information and who knows what else. The only question is whether it will be the AI tool we’re still talking about years from now, or will it burn out and allow others to fill the void? Just yesterday, Google launched its own AI technology called Bard to public testing, and according to Bloomberg, Baidu (BIDU) will launch its own service similar to Chat GPT by March.
These Chat tools may be the next big thing, but the stocks of the three companies launching them haven’t been particularly impressive. Shares of BIDU may be trading right near six-month highs, but the stock is still down over the last year and is trading for less than half of what it traded for at its peak in early 2021. Last week, it closed above its 200-day moving average for the first time in more than 200 trading days ending its second-longest streak of trading below that level in its history as a public company. Its time above the 200-DMA didn’t last long, though, as it closed back below that level the following day and is down over 15% in the last six months. Finally, Microsoft (MSFT) has the most direct exposure to OpenAI’s Chat GPT tool, but it too has been sucking wind. Like GOOGL, it only just recently traded above its 200-DMA and is still down more than 10% in the last six months.
Chat AI tools may be changing the world and there will be big winners, but the ones with the most immediate and direct exposure haven’t seen a big change in their fortunes. Maybe the fact that ‘everyone’ seems to be launching their own versions of these tools suggests that they don’t have a lot of scarcity value after all.
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