Kevin O'Leary remembers what a disruptive force Amazon was in the early 2000s. Lucky for him, he was an early investor in the company. Now, he sees similar disruption occurring in the search business courtesy artificial intelligence and OpenAI’s ChatGPT.
"ChatGPT certainly is a threat to Google, and Google must know that," the Shark Tank star told Insider in an interview published this week. About half of his own search queries, he added, are now done via ChatGPT. The “loser is Google,” he said, and “the A.I. search wars are on."
O'Leary indicated he’s now mulling an opportunity to be an early investor in OpenAI, adding he’s “fortunate to be offered a piece of it." He considers the loss-making venture’s valuation "very, very extreme”—it’s reportedly near the $30 billion mark—given how new the technology is, but he said a deal would likely close in the near future.
If he does invest, he told Insider, it’ll be a modest bet: "Either it'll have a good outcome or it won't, but I won't take down the ship or sell the farm for it. I know there's going to be a lot of competition and a lot of disruption, but I certainly like always to have a piece of the first mover."
OpenAI's advantage
He favors first movers, he added, because they have a marketing advantage.
OpenAI itself has been stunned by the amount of attention ChatGPT has generated.
“We weren’t anticipating this level of excitement from putting our child in the world,” OpenAI CTO Mira Murati said this month in a Time interview. “We, in fact, even had some trepidation about putting it out there.”
But as angel investor Elad Gil noted last month, the rapid uptake of ChatGPT despite it being down much of the time is a good sign of product-market fit. The Google alum added that when an idea works, it tends to work very quickly, something that he’s seen repeatedly with companies he’s worked at and invested in over the years. (Gil was an early investor in Airbnb, Instacart, and Square.)
Of course, OpenAI currently faces heavy losses, not to mention enormous computing costs from all the ChatGPT users it didn’t expect. Microsoft’s large investments should help with that. And this week, the tech giant unveiled an update to its Bing search engine that incorporates ChatGPT technology.
Earlier this month, OpenAI launched ChatGPT Plus, a $20 monthly subscription that provides faster response times and better access to the chatbot when it’s otherwise down due to traffic.
After noting the ChatGPT threat to Google, O’Leary told Insider, “The market hasn't really punished Google stock for this. But a few quarters from now, if ChatGPT really starts to bring in significant subscriber fees, then we'll see what happens.”
