Why ChatGPT developer OpenAI is the No. 1 company on the 2023 CNBC Disruptor 50 list
No innovation has had a greater cultural impact and no technology product has made a bigger splash in the past six months than OpenAI‘s ChatGPT.
The Microsoft-backed startup’s generative artificial intelligence chatbot wowed consumers when it debuted at the end of November. It revealed a quantum leap in the ability of humans to seamlessly interact with AI, which in turn can access the entire information universe of the internet.
AI is having its iPhone moment. Apple’s breakthrough product sparked the invention of a new ecosystem of apps bringing users new services, ranging from Uber to Instagram, because suddenly they had a computer in their pocket. Coinciding with that mobile revolution was a computing one as well, with exponential power to shift data into the cloud.
Now we’re seeing a similar technological boom around AI. It’s not just about the startling experience of interacting with the latest chatbots. AI will influence, disrupt and accelerate every industry. In fact, it’s already happening.
With OpenAI topping this year’s Disruptor 50 list, there’s no question that the dominant theme not just for the annual ranking but for the venture-backed tech startup space as a whole is artificial intelligence.
And it’s not just companies that have AI at their core. We’re seeing a range of enterprise applications for AI to drive efficiency and new capabilities across companies and sectors of the market. Of the 50 companies on this year’s list, 21 told us that AI is critically important to more than 50% of their revenue.
Half of the companies in the top 10 of the 2023 CNBC Disruptor 50 list feature key use of AI, and notably, they represent a diverse range of industries and use cases. Canva, the No. 3 company, is integrating ChatGPT into its design tools, giving customers a new way to be creative. No. 4 Disruptor Relativity Space is using AI to make 3D-printed rockets. No. 7 Disruptor Anduril Industries deploys AI to identify and attack security threats. U.K.-based renewable energy company Octopus Energy, No. 8 on this year’s list, uses AI to efficiently match energy supply and demand. No. 9 Lineage Logistics uses AI to optimize the movement of goods across the temperature-controlled supply chain.
“I do think we are deep into a new technological wave and this is, I think, the biggest one in a while,” OpenAI CEO Sam Altman said in an interview with CNBC late last week.
No. 19 on the Disruptor 50 list, Scale AI, has worked with companies including OpenAI to label the massive amounts of data — images, text, voice and video — that the machines need to digest to become better learners. Also on the list is the No. 44 Disruptor, Cohere, which was founded by former Google Brain researchers who helped develop a new method of natural language processing — transformers — that enable systems to grasp a word’s context more accurately.
Altman said OpenAI is seeing artificial intelligence affect nearly every industry. He pointed to the legal profession as a prime example.
“What we’re hearing from customers using our API for legal companies is that it is totally transforming the way they work and the efficiency that any one lawyer can achieve and the accuracy, freeing people up to do more of what they do really well, and having this new tool to sort of give them as much leverage as possible,” Altman said.
“That is a pattern we’re seeing again and again in many industries, and I’m super excited about it,” he said.
OpenAI CEO Sam Altman speaks during a keynote address announcing ChatGPT integration for Bing at Microsoft in Redmond, Washington, Feb. 7, 2023.
Jason Redmond | AFP | Getty Images
Its ability to make stock market investors skittish became clear when Alphabet‘s shares tanked after the rollout — which some employees called rushed — of its ChatGPT competitor, Bard, earlier this year. And in one of the sectors seen as being most acutely at risk from generative AI, education, Chegg saw its shares fall by close to half just because its CEO referenced an impact from ChatGPT on customer growth during its recent earnings call.
For now, OpenAI has a dual revenue stream: an enterprise software model where it charges companies for access to the platform, and a premium chat app it offers to consumers for $20 monthly, in addition to the free version.
“For now, we’re pretty happy with these two models. We’re super open to explain other things,” Altman said, “you know, when we’re very much at the very start of this technology.”
OpenAI’s business customers include Salesforce, Snapchat, and its backer Microsoft, which is bringing OpenAI’s generative AI technologies to its Bing and Edge internet browsers and Microsoft 365 suite of business software, including Word, PowerPoint and Excel.
Microsoft’s cumulative investment in OpenAI has reportedly swelled to $13 billion, and the startup’s valuation is reported to be as high as $29 billion. The company declined to provide any funding or valuation data.
The growth in the power of AI has been so rapid and dramatic it has sparked concern from politicians and regulators. Those looking to play in the space — including Elon Musk, who was an early co-founder of OpenAI and now says he will launch a competitor — are also speaking out about the risks. Musk, along with Apple co-founder Steve Wozniak and a range of professors and CEOs, signed an open letter in March from the Future of Life Institute, urging AI labs to stop training models that are more powerful than OpenAI’s GPT-4.
Altman first responded in an appearance at a virtual event at MIT, saying that consistent safety guidelines were needed but that this proposed pause was “missing most technical nuance about where we need the pause.”
Altman continues to advocate for regulation. “We really need regulation here. We’ve been calling for it since the start of the company,” he said. “I think we’re going to get some regulation, and we’ll get more over time. And I think that’s really critically important. So I’m happy that it’s happening.”
“I think to get to the future where we have as much of the good use of AI and minimize the what could be quite bad uses of AI,” Altman said, “there’s just no way around having regulation here. We have regulation for other industries with much less powerful technology. So we should definitely have it here.”
Reid Hoffman, partner at venture capital firm Greylock, was an early investor in OpenAI and is now an investor in a number of AI companies and the co-founder of AI startup Inflection. He said he finds some of the criticism to be more dangerous than OpenAI.
“A bunch of it is well-intentioned; there are a bunch of different ways AI can play out,” said Hoffman, who is also on the Microsoft board of directors and had served on the OpenAI board before stepping down due to potential conflicts of interest. “Some of it is less well intentioned: ‘Everyone else, slow down so I can speed up.’ And this is one of those things where it is overall a mistaken effort. … The call to slow down is, in fact, less safe than what they’re proposing,” he said, referring to OpenAI and Altman.
In addition to concerns about AI being used to manipulate or mislead, Altman said he is working to tamp down on bias within OpenAI’s systems.
“A big part of that is what we call RLHF, or reinforcement learning from human feedback, where we take these models that are pretrained on a significant fraction of the internet and we can sort of push them in certain ways,” Altman said. “We can teach the models like, ‘Hey, there’s a bias here in the data. You shouldn’t act this way.'” He said that from GPT-3 to GPT-4 the company has been able to make great strides in reducing bias in the model.
As companies including OpenAI battle bias and push for smart regulation, they’re also working with the established tech behemoths, such as Microsoft, and leaders in all sorts of industries to help them evolve, so they’re not disrupted.
Technology
Qualcomm says it expects $4 billion in PC chip sales by 2029, as company gets traction beyond smartphones
Qualcomm CEO Cristiano Amon speaks at the Computex forum in Taipei, Taiwan, June 3, 2024.
Ann Wang | Reuters
Qualcomm said on Tuesday that it expects its push into new markets to generate an additional $22 billion per year by 2029.
Of that amount, roughly $4 billion will come from PC chips, Qualcomm said at its investor day on Tuesday. The chipmaker just introduced PC processors earlier this year, when it released Snapdragon X for Windows devices.
The latest forecast marks an important milestone for Qualcomm CEO Cristiano Amon, who took over the company in 2021 with a promise to get past a reliance on smartphones. In fiscal 2024, Qualcomm’s handset business reported $24.86 billion in sales, about 75% of its entire chip business.
Qualcomm also said on Tuesday that automotive revenues would rise about 175% by 2029 to $8 billion, of which 80% is tied to contracts that have already been secured.
“We have been on this trajectory realizing that the technologies we have developed over the many years can be very relevant to a number of different industries beyond mobile,” Amon said at the investor event.
Another $4 billion in revenue will come from industrial chips and $2 billion will come from chips for headsets, a category Qualcomm calls XR. About $4 billion of the forecast is a catch-all for other chip sales, like those for wireless headphones and tablets.
Qualcomm shares are up 16% this year, trailing the Nasdaq, which has gained 26%.
Qualcomm grew rapidly over the past decade as its modems and processors became essential parts for high-end smartphones, especially those running Google Android. Qualcomm also sells modems and related parts to Apple for its iPhones.
But the company has warned investors that Apple could choose to stop buying Qualcomm parts as soon as 2027. Qualcomm said on Tuesday that its growing businesses will more than offset any losses from Apple.
A Li Auto L9 electric vehicle (EV) is seen displayed at the Qualcomm booth during the first China International Supply Chain Expo (CISCE) in Beijing, China November 28, 2023.
Florence Lo | Reuters
Qualcomm’s strategy under Amon has been to use the technology its developed for its handset chips, like modems, processors, and AI accelerators, in new markets, including cars, PCs, and virtual reality. The investor event was the first time in years that the company has given a forecast for those new markets. Qualcomm said its total addressable market is as large as $900 billion.
“We put a strategy in ’21, and we’re not changing our strategy,” Amon said.
Laptop and desktop chips are currently dominated by Intel, which has over 70% percent of the market, according to Mercury Research. Intel reported $29 billion in PC chip sales in its 2023.
“The competitive landscape changed between the Windows and Macs,” Amon said, referring to Apple’s move in 2020 to switch from Intel to its own processors. “We saw that as an opportunity, especially as the ecosystem did not have confidence in the existing players to actually deliver a solution.”
The forecast for XR headsets also hints at the growth potential of the VR market over the next five years. Qualcomm supplies chips to many of the top headset makers, including Meta for its Quest and Ray-Bans products.
When it comes to artificial intelligence, Qualcomm calls itself an “edge AI” company, in contrast to cloud-based AI that’s typically powered by Nvidia processors. Company officials didn’t rule out introducing data center products in an interview with CNBC.
Qualcomm suggested that its mobile chips will be able to run the kind of advanced AI that’s restricted to large server farms today, an indication that that company may benefit from the AI boom down the road as the technology becomes more efficient.
“What you can run on the cloud last year, you can run on the device this year,” Durga Malladi, Qualcomm’s senior vice president in charge of planning, said at the event.
Technology
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Technology
Intuit, H&R Block shares fall after report that Trump government efficiency team is considering tax-filing app
Michael Nagle | Bloomberg | Getty Images
The stock prices for H&R Block and Intuit fell after a report Tuesday said Trump’s government efficiency team is considering creating a free tax-filing app.
Intuit, which makes the TurboTax tax-filing software, was down 5%, putting it on pace for its worst day since Aug. 23, when the company’s stock price fell nearly 7%. H&R Block was down 8% and on pace for its worst day since 2020.
President-elect Donald Trump’s “Department of Government Efficiency” has held “highly preliminary” discussions about creating the free tax-filing app, The Washington Post reported. The so-called DOGE will not be an official government department but an outside advisory commission. It will be led by billionaire Elon Musk and former Republican presidential candidate Vivek Ramaswamy and aims to slash government spending.
A DOGE tax-filing app would be a competitor of both H&R Block and TurboTax.
Intuit spokeswoman Tania Mercado didn’t directly address the prospect of a government tax-filing app, but told CNBC in a statement that, “For decades, Intuit has publicly called for simplifying the U.S. tax code so individuals, families, and small businesses can better understand their finances.”
George Agurkis, H&R Block’s director of government relations, said in an email that the company looks forward “to engaging with the new Administration and the Department of Government Efficiency on their ideas related to sound and efficient tax administration.”
It’s unclear where a new DOGE tax app would bridge with newer policies the Biden administration already implemented. Under the Biden administration, the IRS in March rolled out a pilot Direct File program in 12 states, allowing qualified taxpayers to file directly through a government portal. The IRS also offers free filing services through its Free File program for taxpayers who make an adjusted gross income of $79,000 or less.
While both Intuit and H&R Block have free filing options, neither have had stellar records when it comes to transparently offering those services.
The Federal Trade Commission in February filed an administrative complaint against H&R Block for deceptively marketing free filing products and wrongfully deleting users’ in-progress tax data. Intuit, meanwhile, agreed to pay $141 million in restitution “for deceiving millions of low-income Americans into paying for tax services that should have been free,” according to the office of New York Attorney General Letitia James.
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