Goldman Sachs found that the monthly traffic of ChatGPT has plummeted sharply, what does this mean?

After more than a year of fervor sparked by OpenAI's ChatGPT, it seems to be rapidly "cooling down", as reflected in the monthly traffic data of the website.

In a report released this Thursday, Peter Oppenheimer, the Chief Global Equity Strategist and Head of Global Macro Research at Goldman Sachs in Europe, cited the latest data from analysis firm Similarweb, showing a sharp decline in the monthly total visits to the ChatGPT website from spring to midsummer. The report stated:

"In terms of monthly users, the initial 'excitement' about ChatGPT is fading. Of course, this does not mean that the growth rate of the related industry will not be strong, but it does indicate that the next wave of beneficiaries may come from new products and services that can be created based on these foundational models."

The plummet in monthly visits does not signify the end of OpenAI. Customers may be tired of GPT-4 or may turn to other Large Language Models (LLMs) supported by tech giants, such as Grok by Musk's xAI. Some users may find that it is not necessary to integrate AI chatbots into their daily lives.

Recent news indicates that as OpenAI's LLM becomes more advanced, ChatGPT will be improved, and OpenAI will launch new high-end chatbots, charging white-collar workers a fee far higher than the $20 per month for GPT-4.

On the same day Oppenheimer released the above report, also this Thursday, tech media outlet The Information reported that OpenAI executives discussed a new pricing model, with the upcoming high-end LLMs charging as much as $2000 per month, such as a new inference-focused LLM named "Strawberry" and a new flagship LLM named Orion.

The report cited sources familiar with OpenAI's proposed subscription pricing, stating that OpenAI may soon charge some users $2000 per month for using high-end LLMs, with the final price not yet determined, hinting that it makes people "strongly doubt whether the final price will be so high."

While the final charge may not reach $2000, The Information pointed out:

"This is a noteworthy detail because it suggests that even though the paid version of ChatGPT, mainly from the $20 monthly subscription price, is expected to generate $2 billion in annual revenue, its growth rate may not be sufficient to cover the huge costs of operating the service. These costs include the expenses of hundreds of millions of people using the free plan each month."

What does the fading fervor of ChatGPT mean? An article on Wall Street News this Friday mentioned that a recent report authored by Oppenheimer pointed out that the fundamentals of the tech industry are strong, but there is a high concentration risk, recommending diversification of investments. This not only reduces concentration risk but also allows investors to enjoy the growth of the tech industry while not missing out on growth opportunities in other industries driven by AI technology The data in the report shows that although the valuations of top technology companies are not as high as those of other companies during previous bubble periods, their market share is the highest in decades, accounting for 27% of the total market value of the S&P, reflecting an unprecedented level of concentration.

The report compiled the average total returns that can be obtained by buying and holding the top ten stocks since 1980 for 1-10 years, and found that while the absolute returns of dominant companies are still good, these strong returns tend to gradually diminish over time. Moreover, they often remain as stable "compound companies." More importantly, if investors buy and hold dominant companies while other faster-growing companies emerge and outperform the market, the returns of dominant companies usually turn negative.

Taking all these factors into consideration, Goldman Sachs believes:

• Dominant companies are unlikely to be the fastest-growing companies in the next decade.
• Specific risks of stocks in the S&P index are very high currently, and diversification can increase returns