Happy birthday, Chat!

Sunday wasn’t just your recovery day from the Turkey Trot your in-laws guilted you into: It was also ChatGPT’s third birthday.

It’s officially been three years of large language models reshaping how people work, shop, and think. ChatGPT and its peers catalyzed a powerful stock market rally that has pushed the S&P 500 to break record over record, but the gains came with nonstop cheating, the emergence of “slop”, and “Black Mirror”-like romances between humans and chatbots.

So, as we hit this milestone, let’s take a look back at all the psychosis fun we’ve had along the way.

The AI stock frenzy

Shortly after ChatGPT first dropped, it became the fastest growing consumer app ever. Today, roughly 800 million users use it every week.

Its impact on the stock market has been seismic, shifting investors’ focus squarely to big tech. That’s why the seven most valuable companies in the S&P 500, which include Nvidia, Microsoft, Apple, Amazon, Meta, and Broadcom, have accounted for roughly half of the index’s gains since the chatbot’s release in 2022.

Some of the biggest winners have been the “picks and shovels” providers of the AI race—the companies powering AI hardware, like chips. Nvidia, specifically, has exploded roughly 979% since ChatGPT’s launch. Meanwhile, energy company Vistra gained about 635% since November 2022, according to Barron’s. Power giants NRG Energy and Constellation Energy have roughly quadrupled their stock value since the chatbot’s launch.

The bulls versus the bears

With the market becoming so heavily concentrated in AI stocks, onlookers have raised bubble fears, including the very tech titans pushing the technology the most. The reason is that even while chatbots have been transformative, it’s unclear whether or not the AGI (artificial general intelligence) that Silicon Valley is racing to develop will pan out. If sci-fi-like superhuman robot intelligence isn’t really possible—or takes longer to create than expected—the entire market could crumble.

But AI bulls have their defenders, too. “While the bears will continue to yell ‘AI Bubble’ we continue to point to this tech cap-ex supercycle that is driving this 4th Industrial Revolution into the next few years,” wrote Wedbush analyst Dan Ives in a note today. “This is driving trillions of spending over the next few years and thus will keep this tech bull market thriving despite market fears.”

Perhaps the next three years will prove who’s right.—LB