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ChatGPT sign displayed on OpenAI website displayed on a laptop screen and OpenAI logo displayed on a phone screen are seen in this illustration photo taken in Krakow, Poland on February 2, 2023.

Jakub Porzycki | Nurphoto | Getty Images

What is ChatGPT? I asked the buzzy artificial intelligence chatbot, which has ignited conversation in schools, corporate boardrooms and social media, to explain itself.

In its own description, ChatGPT is “an AI-powered chatbot developed by OpenAI, based on the GPT (Generative Pretrained Transformer) language model. It uses deep learning techniques to generate human-like responses to text inputs in a conversational manner.”

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The tool is the talk of the business world. It has been mentioned on earnings calls by management from a range of companies including oil giants, banks — and even the industrial behemoth Caterpillar.

It has also sparked concerns over potential abuses. In classrooms, students have used ChatGPT to generate entire essays, while hackers have begun testing it to write malicious code.

So what is ChatGPT, exactly? Here’s a simple guide on all you need to know about the popular AI chatbot.

What is ChatGPT?

ChatGPT is an AI chatbot developed by San Francisco-based startup OpenAI. OpenAI was co-founded in 2015 by Elon Musk and Sam Altman and is backed by well-known investors — most notably Microsoft

It is one of several examples of generative AI. These are tools that allow users to enter written prompts and receive new human-like text or images and videos generated by the AI.

ChatGPT provides an AI-generated answer to the query “Tell me about ChatGPT.”

Leon Neal | Getty Images

Prior examples include Dall-E, a text-to-image program from OpenAI that garnered attention from people captivated by its ability to come up with realistic, often absurd, pictures that match people’s text descriptions.

Lensa, an app based on open-source AI project Stable Diffusion, has been used to turn selfies into illustrious self-portraits inspired by everything from sci-fi to anime.

In ChatGPT’s case, the service is a text-based tool that can produce human-like responses to user requests — from poetry in the style of William Shakespeare to advice on what to do for a child’s birthday party.

What’s so special about it?

ChatGPT is powered by a large language model, or LLM, meaning it’s programmed to understand human language and generate responses based on large corpora of data.

ChatGPT’s LLM is called GPT-3.5. It is an upgrade of OpenAI’s GPT-3 language model.

With a whopping 175 billion parameters, GPT-3 is one of the largest and most powerful language processing AI models to date.

Why ChatGPT is a game changer for AI

What makes ChatGPT so impressive is its ability to produce human-like responses, thanks in no small part to the vast amounts of data it is trained on.

“What’s exciting is that the responses are more and more human-like, so what you’re seeing is things that we did not think computers could do before,” Jeffrey Wong, global chief innovation officer at professional services firm EY, told CNBC.

Another thing that differentiates ChatGPT is its ability to log context from users’ earlier messages in a thread and use it to form responses later in the conversation.

Why is it so popular? 

No generative AI application has quite managed to achieve the kind of influence and virality that ChatGPT has.

It has been the subject of countless memes and the talk of the business community at the World Economic Forum in Davos, Switzerland, last month. Chinese tech giant Baidu made its own version called Ernie Bot.

The chatbot signed up 1 million in the five days after its release, according to a Dec. 5 tweet from Altman. By January, ChatGPT had amassed 100 million active users only two months into its launch, making it the fastest-growing consumer application in history, according to a UBS note published last week.

It took TikTok nine months to reach 100 million users and Instagram two and a half years.

Jan. 31 was the biggest-ever day for ChatGPT, with its website garnering a record 28 million daily visits, according to data from Similarweb. That was up 165% from a month ago.

One reason for ChatGPT’s popularity is its accessibility. The service is public to anyone via the OpenAI website, and its potential applications range from school homework to legal briefs.

The timing has also played a part, according to Wong.

“When we come out of pandemics, you typically see this burst of creativity,” he said. “The biggest example is, after the Black Plague, there was this Renaissance, this burst of creativity across the board.”

Why it’s got tech giants clashing

Microsoft is betting billions on ChatGPT’s owner, OpenAI. In late January, the tech titan announced a multiyear, multibillion-dollar investment deal with OpenAI.

Microsoft declined to disclose a specific dollar amount. A report from Semafor said the Redmond, Washington tech giant was in talks to invest as much as $10 billion in the company. Microsoft previously invested $1 billion into OpenAI.

On Tuesday, Microsoft held a press event where it announced new AI-powered updates to its Bing search engine and Edge browser. Altman confirmed Microsoft had incorporated some of OpenAI’s GPT-3.5 language technologies into Bing.

Watch CNBC's full interview with Microsoft CEO Satya Nadella

That was a day after Google unveiled its own response to ChatGPT, called Bard AI. The company plans to start rolling Bard out in Google Search in the coming weeks.

ChatGPT is seen as a threat to Google. Rather than turn to the web search pioneer for your most burning questions, people could rely on ChatGPT. 

Google was actually early to the advanced conversational AI game, through the launch of its own large language model called Lamda in 2021. It missed the boat on launching its own consumer product based on Lamda — and hopes to change that with Bard, which is powered by the language model.

A step towards ‘general’ intelligence? 

What is Web3? We ask the man who invented the word

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Tesla launches refreshed Model Y in China to fend off domestic rivals

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Tesla launches refreshed Model Y in China to fend off domestic rivals

Tesla launched a revamped version of its Model Y in China.

Tesla

Tesla on Friday announced a revamped version of its popular Model Y in China, as the U.S. electric car giant looks to fend off challenges from domestic rivals.

The Model Y will start at 263,500 Chinese yuan ($35,935), with deliveries set to begin in March. That is 5.4% more expensive than the starting price of the previous Model Y.

A spokesperson for Tesla China said that the new Model Y is only open for pre-sale in the Chinese market, rather than being launched globally.

Tesla’s Model Y refresh comes after the auto giant this month reported its first ever annual decline in overall deliveries for 2024.

Elon Musk’s electric vehicle firm is facing heightened competition around the world, from startups and traditional carmakers in Europe. In China, the company continues to face an onslaught of rivals from BYD to newer players like Xpeng and Nio.

Jason Low, principal analyst at Canalys, notes that the Tesla Model Y was the best-selling EV in China in 2024 and that the popularity of the car “remains high.” However, he noted that the competition in the sports utility vehicle (SUV) segment with vehicles priced between 250,000 yuan and 350,000 yuan “has been fierce.”

“Tesla must showcase compelling smart features, particularly a unique but well localized cockpit and services ecosystem,” as well as “effective” semi-autonomous driver assistance features “to ensure its competitiveness in the market,” Low added.

Tesla is offering a number of incentives for customers to buy the Model Y including a five-year 0% interest financing plan.

The new Model Y can accelerate from 0 kilometers per hour to 100 kilometers per hour in 4.3 seconds, Tesla said, exceeding the speed capabilities of the previous vehicle. The Model Y Long Range has a further driving range on a single charge versus its predecessor.

Tesla has not introduced a new model since it began delivering the Cybertruck in late 2023, which starts at nearly $80,000.

Investors have been yearning for a new mass-market model to reinvigorate sales. Tesla has previously hinted that that a new affordable model could be launched in the first half of 2025.

Despite Tesla’s headwinds, the company’s stock is up nearly 70% over the last 12 months, partly due to CEO Musk’s close relationship with U.S. President-elect Donald Trump.

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World’s biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

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World's biggest chipmaker TSMC posts record 2024 revenue as AI boost continues

The logo for Taiwan Semiconductor Manufacturing Company is displayed on a screen on the floor of the New York Stock Exchange on Sept. 26, 2023.

Brendan Mcdermid | Reuters

Taiwan Semiconductor Manufacturing Co. posted December quarter revenue that topped analyst estimates, as the company continues to get a boost from the AI boom.

The world’s largest chip manufacturer reported fourth-quarter revenue of 868.5 billion New Taiwan dollars ($26.3 billion), according to CNBC calculations, up 38.8% year-on-year.

That beat Refinitiv consensus estimates of 850.1 billion New Taiwan dollars.

For 2024, TSMC’s revenue totaled 2.9 trillion New Taiwan Dollars, its highest annual sales since going public in 1994.

TSMC manufacturers semiconductors for some of the world’s biggest companies, including Apple and Nvidia.

TSMC is seen as the most advanced chipmaker in the world, given its ability to manufacture leading-edge semiconductors. The company has been helped along by the strong demand for AI chips, particularly from Nvidia, as well as ever-improving smartphone semiconductors.

“TSMC has benefited significantly from the strong demand for AI,” Brady Wang, associate director at Counterpoint Research told CNBC.

Wang said “capacity utilization” for TSMC’s 3 nanometer and 5 nanometer processes — the most advanced chips — “has consistently exceeded 100%.”

AI graphics processing units (GPUs), such as those designed by Nvidia, and other artificial intelligence chips are driving this demand, Wang said.

Taiwan-listed shares of TSMC have risen 88% over the last 12 months.

TSMC’s latest sales figures may also give hope to investors that the the demand for artificial intelligence chips and services may continue into 2025.

Foxconn, which assembles Apple’s iPhones, reported its highest-ever fourth quarter revenue this week, as it notched strong demand for AI servers.

Meanwhile, Microsoft this month said that it plans to spend $80 billion in its fiscal year to June on the construction of data centers that can handle artificial intelligence workloads.

CNBC’s Jordan Novet contributed to this report.

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Supreme Court set to hear oral arguments on challenge to TikTok ban

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Supreme Court set to hear oral arguments on challenge to TikTok ban

Tik Tok creators gather before a press conference to voice their opposition to the “Protecting Americans from Foreign Adversary Controlled Applications Act,” pending crackdown legislation on TikTok in the House of Representatives, on Capitol Hill in Washington, U.S., March 12, 2024.

Craig Hudson | Reuters

The Supreme Court on Friday will hear oral arguments in the case involving the future of TikTok in the U.S., which could ban the popular app as soon as next week.

The justices will consider whether the Protecting Americans from Foreign Adversary Controlled Applications Act, the law that targets TikTok’s ban and imposes harsh civil penalties for app “entities” that continue to carry the service after Jan.19, violates the U.S. Constitution’s free speech protections.

It’s unclear when the court will hand down a decision, and if China’s ByteDance continues to refuse to divest TikTok to an American company, it faces a complete ban nationwide.

What will change about the user experience?

The roughly 115 million U.S. TikTok monthly active users could face a range of scenarios depending on when the Supreme Court hands down a decision.

If no word comes before the law takes effect on Jan. 19 and the ban goes through, it’s possible that users would still be able to post or engage with the app if they already have it downloaded. However, those users would likely be unable to update or redownload the app after that date, multiple legal experts said.

Thousands of short-form video creators who generate income from TikTok through ad revenue, paid partnerships, merchandise and more will likely need to transition their businesses to other platforms, like YouTube or Instagram.

“Shutting down TikTok, even for a single day, would be a big deal, not just for people who create content on TikTok, but everyone who shares or views content,” said George Wang, a staff attorney at the Knight First Amendment Institute who helped write the institute’s amicus briefs on the case. 

“It sets a really dangerous precedent for how we regulate speech online,” Wang said.

Who supports and opposes the ban?

Dozens of high-profile amicus briefs from organizations, members of Congress and President-elect Donald Trump were filed supporting both the government and ByteDance.

The government, led by Attorney General Merrick Garland, alleges that until ByteDance divests TikTok, the app remains a “powerful tool for espionage” and a “potent weapon for covert influence operations.”

Trump’s brief did not voice support for either side, but it did ask the court to oppose banning the platform and allow him to find a political resolution that allows the service to continue while addressing national security concerns. 

The short-form video app played a notable role in both Trump and Democratic nominee Kamala Harris’ presidential campaigns in 2024, and it’s one of the most common news sources for younger voters.

In a September Truth Social post, Trump wrote in all caps Americans who want to save TikTok should vote for him. The post was quoted in his amicus brief. 

What comes next?

It appears TikTok could really get shut down, says Jim Cramer

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