OpenAI's Acquisition Blitz: A Deep Dive into Their First Strategic Move

0:00The holidays are here and that means it's the most wonderful time of the year to save with Rakuten. Use Rakuten to stack cashback at your favorite stores on top of holiday sales. That's savings on savings. With Racketing, you get cash back on gifts for everyone on your list. From toys for the kids, to kitchen gear for the person who loves to cook, to electronics for everyone. You can even save on something for yourself. Just shop the stores you love and cash back is automatically added to your account. And you can get paid with gift cards, PayPal or check. or eligible American Express card members can even choose to earn membership rewards points instead of cashback.

0:41It's truly a no-brainer. Join for free today and get a new member bonus after minimum qualifying purchases. Just go to Rakuten.com, download the app, or install the browser extension. That's R-A-K-U-T-E-N. Terms and conditions apply. What can 160 years of experience teach you about the future? When it comes to protecting what matters, Pacific Life provides life insurance, retirement income, and employee benefits for people and businesses building a more confident tomorrow. Strategies rooted in strength and backed by experience. Ask a financial professional how Pacific Life can help you today. Pacific Life Insurance Company, Omaha, Nebraska, and in New York.

1:24Pacific Life and Annuity, Phoenix, Arizona. Today on the podcast, we're going to be talking about a recent acquisition that OpenAI has made, leaving us wonder, you know, why did they acquire this company? Was this something they were unable to do before? Was this something they wanted to scale up really quickly? We're going to be talking about that. In addition, we want to talk about the fact that it looks like ChatGPT may be winning over Stack Overflow. And we're going to be diving into that as well. So without further ado, let's jump into it. So OpenAI, of course, famous for ChatGPT, recently announced that it is acquiring Global Illuminations.

1:58This is a New York-based startup that essentially uses AI to craft creative tools, digital experiences, and infrastructure. The acquisition is the first for OpenAI in approximately seven years. This is a really big deal, right? This is the first company they've actually acquired. And details regarding the transaction terms are still undisclosed. We how much this was acquired for. But in a statement on their blog, OpenAI said, quote, the entire team has joined OpenAI to work on our core products, including ChatGBT. Global Illumination is the brainchild of founders Thomas Dimson, Taylor Gordon, and Joey Flynn.

2:39And it has engaged in a whole bunch of projects since 2021, when it was first created. And notably, the venture received support from prominent VC firms such as Paradigm, Benchmark, and Slow. So impressively, the minds behind Global Illumination had earlier played pivotal roles in product design and development at tech giants like Instagram, Facebook, YouTube, Google, Pixar, and Riot Games. So while serving as the director of engineering at Instagram, Dimson significantly contributed to enhancing the platform's discovery algorithm, and his contributions at Instagram include the initiative of teams focusing on the explore tab feed and stories ranking so he also worked on ig tv and a couple other things right so obviously he's very well ingrained in tech and did a lot of big moves in some big products on some big platforms so then that begs the question right what is you know what is global illuminations actually going to do so one of the latest offerings from them is actually Biomes, which is an open source sandbox MMORPG.

3:46It's reminiscent of Minecraft, but crafted from web platforms. So the game's future remains really ambiguous. And given the recent acquisition, it's possible that Global Illuminations endeavors under OpenAI's umbrella might veer away from entertainment focused projects and more towards other things. So though open AI has previously steered clear of acquisitions. I think the AI giant right now, they have a lot of money in venture capital from Microsoft and other VCs. And so they have been proactively funding and offering grants to different AI firms over the years. And I think evidently AI is strategically positioning itself for a significant commercial breakthrough.

4:26So despite GPT-4's worldwide usage right now, I think open AI reportedly funneled over 540 million dollars into development last year so it's definitely spending very very heavily to improve its core products i think the the investment also kind of encompassed the strategic hiring of top talent from competitors like google which you know obviously is not going to be super cheap and in addition while openai's revenue touched 30 million dollars in the year before ceo sam altman has reportedly informed stakeholders about ambitious plans aiming to scale this figure to$200 million in the current year and envisioning a really robust$1 billion the following year, which could be impressive.

5:09But in order to pull this off, they're definitely going to need a lot more help. And it would appear that this new company they've acquired is going to help them do just that. On to another piece of news, the fact that it would appear that ChatGPT is beating Stack Overflow. So if anyone remembers where this was at the beginning of the year, Stack Overflow is the website that developers use to post questions and get responses on how to do code projects how to how to develop different types of code get code snippets um now the problem is stack overflow saw a massive decline in traffic after chat chipt launched when people realized they could ask chipt for questions about coding to write code and all sorts of things uh stack overflow took a massive hit in recent uh just recently stack overflow has made a lot of changes to a setting saying that they are going to charge people to to essentially use their data if they're going to train models because i believe chat gpt like trained with using stack overflow data which is you know pretty tricky for stack overflow and in addition i believe they're training their own ai model for developers but with all of that underway and all those announcements it would appear in the you know the today in today's term that chat gpt may still be winning so even with all of the super experienced data that Stack Overflow has.

6:26And I think it still is a really big tool. Data from an analytics firm in May said that the platform's traffic declined on average 6 % in every month of the year, culminating to a 17 % drop by April, right? So we're just seeing month over month Stack Overflow's traffic is getting cut down due to chat GPT. So a study at Purdue University titled, Who Answers to be Better in In-Depth Analysis of ChatGPT and Stack Overflow? Answers to Software Engineering's Questions. It's kind of a long title, but in any case, this study suggests that they found a concerning trend. A notable chunk of ChatGPT's answers to coding-related queries were either misleading or downright false.

7:08However, in a comparison test, 40 % of participants favored ChatGPT's responses and were swayed by its really good response style. So of 512 Chai Gypti responses analyzed, a whopping 52 % were flagged as incorrect and alarmingly 77 % of those preferred by participants were inaccurate. So despite really glaring inaccuracies in Chai Gypti's answers, a subset of participants still leaned towards them over Stack Overflow and Stack Overflow's responses. So Samina Kabir is the co-author of the study shed some light on this saying, quote, participants overlooked the inaccuracies when they found Chai Chibiti's responses insightful.

7:51Its confidence, articulate, delivery style, even if misleading fosters user trust. So according to Kabir, the blend of this language really makes people like it. So while language models like Chai Chibiti promise really quick answers, they are not always 100 % accurate. So Stack Overflow recognizes these pitfalls and has prohibited ChatGPT derived responses, right? You can't ask coding questions on ChatGPT and post them on Stack Overflow. So a lot of people are doing that right at the beginning of ChatGPT. And I think that this is really interesting, right? Humans actually prefer it. Now, the other thing, the other caveat I will say is a lot of times when you hear these kind of articles or these kind of studies and they're like, oh my gosh, 52 % of the coding responses were inaccurate.

8:40That might be true, right? If someone says, and also let's, I'll define inaccurate, but you might say like, hey, code me something that does X, Y, and Z. It spits out some code. Now a respondent might say, okay, this looks great. Pop it into wherever they're developing. And then they're going to go debug it. They're going to fix whatever's wrong. If you're kind of a semi-experienced developer, you're like, I just need something to throw something together for me real quick. I know it's going to be like referencing libraries that don't exist, whatever, I can go fix those and change those. And Stack Overflow might be more cleaner code that you could instantly copy and paste, but perhaps it's harder to find the result on Stack Overflow.

9:19I'm not 100 % sure, but what I will say is on the projects I'm currently working on, my developers literally say they cannot live without GPT-4 and that they use it every day. And also that they have like went away from Stack overflow a lot so like i i see this in real time playing out across real companies um and i do think that you know while a lot of these studies are going to be saying like so it's funny because the the like takeaway from the study is like chadshippity is winning people prefer it um and then everyone's like yeah but it's like less accurate than stack overflow it's like at the same time um sometimes all it needs is a few tweaks to what chadshippity is coming up with and it can come up with it a lot faster and it can do a lot bigger components than stack overflow so I think it does have a lot of benefits and I don't think people should get I think inevitably we're going to get less caught up about like oh it has like errors and be like oh my gosh it wrote me like an entire page of code instead of like two snippets that were perfect from Stack Overflow the entire page needed a couple tweaks so well you could say it was an inaccurate entire page in two seconds I wrote an entire page that I would have to piece together with a bunch of different things from Stack Overflow so there are some pros and cons to it but I definitely know a lot of developers that can't live without it and so because of that I think that um chat gpt is only going to get better and I think stack overflow really needs to um up its game it needs to get its ai assistant out there asap and scale it because that is really where the space has gone I think right off the bat uh their biggest move as soon as they felt threatened by chat gpt was to replicate it with their own code base um it feels like they just recently started doing that and so I mean And for their sakes, I hope that they get it done sooner than later.

10:59But it's going to be an interesting space to follow and see if once they do create something, which they've announced they will, if they're able to actually compete against ChatGPT or if the brand name is so big and everyone is already using that by that point. So definitely an area to follow in the future.