When ChatGPT was released for wide use towards the end of 2022, almost everyone who experienced it understood that it was a global turning point, one on which new services and industries would be built and existing companies and business models would be damaged.
In the past months, we were privileged to see many uses and capabilities made available to users based on the powerful conversation model, and its even more powerful successor 4-GPT — from integration into search engines and office software, to the empowerment of language learning applications, to advanced cyber protection applications, and hundreds if not thousands of ideas and services between and between
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The other side of the coin, the damage to existing industries and professions, waited on the sidelines. There were perhaps those who hoped that it would be months before this injury materialized. But in the world of generative artificial intelligence (Generative AI), changes are not measured in years, not even months. Now the first notable victims of the new technology are arriving in the field, and they certainly won’t be the last.
This week two prominent companies have already announced substantial changes or profound damage to their operations as a result of the capabilities provided by conversation models such as ChatGPT. One is content at this stage with stopping recruitment, the other is in danger of the collapse of its business model.
The first and better known company is IBM, one of the oldest players in the computing world. In an interview with Bloomberg, CEO Arvind Krishna said on Tuesday that IBM will delay or slow down hiring for jobs that AI systems will be able to perform in the coming years, especially support jobs such as human resources.
“These are positions that do not include interaction with consumers and currently employ about 26,000 workers (out of about 250,000 workers in total – see). I can easily see 30% of them being replaced by AI and automation in the next five years,” Krishna said.
He added that tasks such as issuing verification letters to employees or transferring employees between departments can be fully automated. On the other hand, tasks such as vehicle evaluation or workforce productivity will probably not be replaced in the next decade. This is a reduction of about 7,800 jobs, although at this stage IBM is not talking about actual layoffs, but about stopping new recruitments and avoiding replacements of employees who have left their positions.
And while IBM is reducing recruitment to jobs that a computer can do, there are companies whose entire business model is already collapsing. One of the immediate and expected uses of ChatGPT was assistance in writing assignments and academic papers. The response capabilities of the conversation model and the possibility of using it to write full academic papers were so significant that already in the days after its launch, academic institutions and researchers in the field had to respond to the uses made by students, and check whether the end of the academic assignment as it is known today has come.
The end has not yet arrived, but the one who is already counting the end backwards is Chegg, a technology company in the field of education. Its main activity includes online services to help prepare homework and private lessons, alongside the rental of digital or physical textbooks. Yesterday, its stock fell by 38%, after it issued a warning that ChatGPT threatens the growth of homework assistance and test preparation services and presented a quarterly revenue forecast that was significantly lower than analysts’ forecasts.
According to CEO Dan Rosenzweig, the impact of ChatGPT was felt only in the last few weeks. “In the first part of the year, we did not see a significant impact from ChatGPT on the growth rate of accounts and we met all expectations for new subscribers,” he said. “However, since March we have seen a jump Significant in the interest of students in ChatGPT. Now we believe that this has an effect on the growth rate of new customers.”
Chegg is not burying its head in the sand and has announced a 4-GPT based product, which will combine the expertise and knowledge it has gained over the years with the capabilities of the conversation model, and will function as a smart personalized private tutor combining AI with human teachers. “Based on our research, 85% of students would prefer to have human teachers involved in supporting their learning,” Rosenzweig said. “That’s why we believe that the future lies in the combination of AI and human support.”
However, the company’s AI-based service has not yet been launched for wide use, nor has it announced a launch date. There is also no certainty that the capabilities it will offer will justify a special payment compared to the capabilities that can currently be obtained for free from ChatGPT, or that students who prefer the involvement of a human expert are also willing to pay for such involvement. And at the rate at which the world is moving these days, by the time the service is launched, it is possible that the usage habits that will be established in the meantime will make it niche or unnecessary.
With the unveiling of ChatGPT it was clear that this was a disruptive technology that would impact diverse industries. But what was less obvious is the rapid rate of change, which already leads to profound changes. The latest developments make it clear that it is not enough to react to the entry of generative artificial intelligence into our lives, but that it must be done immediately. Those who delay may find that they no longer have any way to respond.