The boom (or bubble, depending on who you ask) of artificial intelligence is largely supporting the markets. In the United States, big technology companies, led by Nvidia, are mainly responsible for the S&P 500 setting record after record. These companies are investing billions in this technology which, despite not necessarily having an immediate return, boosts market valuations. But not all are lights. On the other side of this table are the possible losers of AI, business models shaken, like Chaplin’s mythical character, by modern times: call-centerseducational and language teaching companies suffer from investor fear that their model will become obsolete.
When Open AI, the company behind Chat GPT, made public its new open model a month ago, Duolingo shares fell almost 4%. Interestingly, the online language teaching company has been implementing artificial intelligence in its business for some time and, in fact, uses technology developed by Open AI. Why this reaction, then? Because, among other features, the new GPT Chat offers instant translation. The reflection of the very sensitive markets was the following: why would someone spend their money on a language learning application if there is another that makes that effort unnecessary.
Although exaggerated, and momentary, (Duolingo is down 8% this year, but the majority of analysts recommend its purchase), the reaction of investors shows that the markets are not only attentive to Nvidia, Alphabet or Meta, but that they have an eye based on who can be left behind in the frenetic race of AI. And the education sector is at the center of its concerns: just over a year ago, the educational platform Chegg, whose business model is based on paid subscriptions, recognized that Chat GPT was a threat to its help services for doing things. homework at home. It dropped 50% of its value in a single day—the biggest drop in its history—and spread pessimism to other educational values around the world, such as the British publisher Pearson, which recorded its biggest cut in six years, or the Chinese Yuhua Education (-16%) or Wisdom Education (-7.2%).
As with Duolingo, the case of Chegg responds to market logic: why invest in a paid platform focused on preparing homework and essays when there is a tool that monopolizes them all and is also free? These are doubts that extend to the entire online educational business, and that, with each new presentation of Chat GPT – with videos of children learning with their parents and a screen that speaks directly to them like a human – they increase. Chegg has fallen more than 65% so far this year on the stock market, and Duolingo is 21.8% below the historical highs it set at the beginning of May.
Distance education models thus join what is probably the sector most highlighted by the threat of AI: call-centers. In February, the French firm Teleperformance sank 29% on the stock market one day after the Swedish technology company Klarna assured that its telecare service developed by OpenAI is equivalent to the work of 700 operators. Already last year, the company had warned that between 20% and 30% of its customer service calls will end up being automated in the next three years. In April of this year, the CEO of the Indian technology consultancy Tata warned that AI could put an end to these businesses, which are a driver of employment in the Asian country.
Adapt or die
The approach followed by the threatened ones responds to the classic axiom “if you can’t beat your enemy, join him.” Or, at least, adapt: Google is immersed in an investment fever to be able to rival Open AI, because, as several analysts point out, If search engines don’t adapt, they will be swallowed up for tools that respond to users’ doubts and searches. However, as Russ Mold, investment director of the British firm AJ Bell, pointed out to Bloomberg, companies whose income depends on those clicks have more to fear, because in a short time no one will have to click on a link to resolve a question. .
In the spotlight for the automated generation of videos and images, Adobe, a leader in web page, video and image editing software, announced two months ago that it is studying the integration of generative AI tools within its video program. Curiously, the publication of an image generated by artificial intelligence in May of last year, showing smoke coming out of a government building near the Pentagon, in the United States, caused the S&P 500 to collapse for a few moments. Duolingo itself has made staff cuts to replace them with automated models, and already integrates the GPT-4 developed by Open AI.
“AI spending plans are not welcomed unconditionally,” warns, however, Yves Bonzon, head of investment at the Swiss private bank Julius Baer. The scope of this new disruptive force, both positive and negative, remains to be seen, but the large economic players are already positioning themselves. The founder of Microsoft, Bill Gates, warned in a university talk, a little over a year ago, of the dimension of these modern times: “You will never again enter an Internet search engine. You will never enter Amazon again.”
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