In Retrospect

Frankenstein’s monster?

Artificial intelligence is an asset, and even a necessity in the present age but, to create a bulwark against its potential ‘deflationary’ impacts, preventive measures and regulatory & oversight mechanisms need to be put in place

Frankenstein’s monster?

One of the most talked-about topics in the tech world today are artificial intelligence (AI) and chatbots. Apps like ChatGPT — a chatbot developed by OpenAI (founded in 2015) and launched in November 2022 — are quite popular these days. Elon Musk, a co-founder of OpenAI (who left in 2018), warned the world that “One of the biggest risks to the future of civilisation is AI”. Musk told attendees at the World Government Summit in Dubai, shortly after mentioning the development of ChatGPT, “It’s both positive and negative and has great, great promise, great capability”. But Musk also emphasised, “with that comes great danger”, reported CNBC. Meanwhile, India Today has reported that the Head of Google Search, in a conversation with a German publication, warned against the harmful effects of artificial intelligence. He claimed, “chatbots can hallucinate and provide answers which are convincing but completely made-up”.

Reacting to this criticism, OpenAI says that fixing this issue is difficult because there is no source of truth in the data chatbots use to train the model; and supervised training can also be misleading “because the ideal answer depends on what the model knows, rather than what the human demonstrator knows”, reports the Guardian. However, in an interesting development, it is claimed that Microsoft’s AI language model, integrated into its search engine Bing, has some ethics. Recently, when a woman decided to put it to the test by asking the AI chatbot to write a cover letter for her for a position in a company, it flatly refused by saying, “I’m sorry, but I cannot write a cover letter for you. That would be unethical and unfair to other applicants”, reported Business Insider. The software, instead, provided her with some tips and links to several cover-letter writing resources.

Since 2019, after the exit of Elon Musk in 2018, Microsoft has entered into a long-term partnership with OpenAI through a multiyear, multibillion-dollar investment to accelerate AI breakthroughs. As per Microsoft’s website, now the collaboration is extended across AI supercomputing and research, which enables them to independently commercialise the advanced AI technologies. They have identified three major areas of future collaboration:

* Microsoft will increase investments in the development and deployment of specialised supercomputing systems to accelerate OpenAI’s ground-breaking independent AI research;

* Microsoft will deploy OpenAI’s models across its consumers and enterprise products, and introduce new categories of digital experiences built on OpenAI’s technology. This includes Microsoft’s Azure OpenAI Service, which empowers developers to build cutting-edge AI applications through direct access to OpenAI models;

* As OpenAI’s exclusive cloud provider, Azure will power all OpenAI workloads across research, products and API services.

Google has also announced its own chatbot — the Google Bard. The chief executive of its parent company, Alphabet, has announced that Google will trial its own artificial intelligence chatbot to prepare it for public release “in the coming weeks”, reports the Telegraph, UK. Google’s chatbot Bard will compete with the popular Microsoft-backed ChatGPT which was launched in November 2022.

Chatbot — a disruptive computer programme

Apparently, a new computer programme, in the chatbot sector, has arrived to challenge the monopoly of Google search engine. To get some preliminary knowledge about a ‘chatbot’, I took resort to OpenAI and entered into a conversation with a ChatGPT language model which gave me the following answer:

“A chatbot is a computer programme designed to simulate conversation with human users, especially over the Internet. Chatbots use natural language processing (NLP) and artificial intelligence (AI) technologies to understand and respond to user input. They can be integrated into messaging platforms, websites, or mobile applications, and can be programmed to perform a wide range of tasks, such as providing customer support, answering frequently asked questions, and even engaging in casual conversations. There are various types of chatbots, including rule-based chatbots, which operate based on pre-defined rules and decision trees, and AI-powered chatbots, which use machine learning and NLP to understand and respond to user input in a more human-like way. Chatbots have become increasingly popular in recent years, as they can provide an efficient and convenient way for businesses to interact with customers and improve customer experience”.

ChatGPT is a revolutionary new tool that has made headlines since it was released in November last year. The AI-powered chatbot generates responses based on a prompt of user inputs. It is based on the GPT (Generative Pre-training Transformer) architecture and can be fine-tuned for various language tasks, such as question-answering, language translation, and text summarisation. According to Forbes, users have utilised ChatGPT for everything, from help with homework to writing poems. Some see ChatGPT as a direct threat to Google’s USD 149-billion search engine business, an area where Google has been the leading player for years. Few experts have compared ChatGPT’s emergence to that of the first iPhone back in 2007, since the tool is bringing the power of AI into the hands of non-technical users. With over 84 per cent of Americans now owning a smartphone, some believe this AI-based tool will become a household staple for many in coming years.

In addition to ChatGPT, hundreds of new chatbots like Companion (for dementia patients); Insomnobot 3000 (for helping insomniacs get through the night); HubSpot (the most user-friendly chatbot builder); Intercom (chatbot for customisation); Drift (a sales chatbot); Salesforce Einstein (for salesforce users); WP-Chatbot (for WordPress sites); LivePerson (for omnichannel messaging); and Genesys DX (for natural language processing) are being used by leading corporations to ‘improve their customer’s experience’.

Impact on economy

The increasing adoption of chatbots and other forms of artificial intelligence (AI) in various industries can have both positive and negative impacts on the job market. In a few cases, it could be disruptive. However, the impact of chatbots on the job market will depend on a variety of factors, including its rate of adoption, the industry, and the specific tasks being automated. While some jobs may be at risk of displacement, others may benefit from increased efficiency and productivity.

On one hand, chatbots can automate routine and repetitive tasks, freeing up human workers to focus on more complex and higher-value tasks. For example, chatbots can handle basic customer service inquiries, allowing human customer service representatives to handle more complex or sensitive issues. This can improve productivity and efficiency, and may even lead to the creation of new jobs in areas such as AI development and data analysis.

On the other hand, the automation of certain tasks through chatbots and other forms of AI could lead to job displacement in some industries. For example, as chatbots become more sophisticated, they may be able to replace certain administrative or customer service roles. Additionally, the widespread adoption of AI and automation may require workers to develop new skills, or transition to different roles, which can be challenging for some.

On February 11, JP Morgan analysts released a report suggesting that widespread adoption of generative AI models like ChatGPT will affect the Indian IT sector negatively with respect to market share and pricing for IT companies, at least in the short term. Like other technologies, AI is not free from challenges. One such downside of AI generative models is the threat to pricing. JP Morgan research says that generative AI can be a deflation driver in the near term on legacy services and on pricing, necessitate staff retraining, and can drive loss of competitiveness. “There have been several historical drivers of productivity that have ended up being deflationary drivers on pricing over the last 20 years,” the research adds. Nonetheless, it also mentioned that generative AI models are capable of driving a new source of disruption which can have a combination of headwinds and tailwinds for IT service companies. However, the report says that AI chatbots will help boost productivity, and widen employability, contrary to the fear of job losses. The models will also drive down the costs, ‘creating a new area for change management projects’, reports LiveMint citing the JP Morgan report.

Elon Musk, a co-founder of OpenAI, is very concerned with the recent developments in AI. According to him, ChatGPT “has illustrated to people just how advanced AI has become.” But unlike cars, airplanes, and medicines, which must abide by regulatory safety standards, AI does not yet have any rules or regulations to keep its development under control. “I think we need to regulate AI safety. Frankly, I think, it is actually a bigger risk to society than cars or planes or medicine. Regulation may slow down AI a little bit, but I think that might also be a good thing,” Musk added. The billionaire has long warned of the perils of unfettered AI development. In March 2018, he said artificial intelligence was far more dangerous than nuclear warheads. He also flagged the need for a regulatory body overseeing the development of superintelligence. Musk’s words have more gravity today, as the rise of ChatGPT threatens to upend the job market with more advanced, human-like writing.

However, all are not that worried. While commenting on how AI is expected to disrupt business in the near future, Ajay Agarwal et al made a very significant observation in their piece titled, ‘ChatGPT and How AI Disrupts Industries’, published in the ‘Harvard Business Review’ (December 12, 2022). The authors wrote: “ChatGPT, from OpenAI, shows the power of AI to take on tasks traditionally associated with ‘knowledge work.’ But the future won’t just involve tasks shifting from humans to machines. When technology enables more people to complete a task, with help from a machine, the result is typically entirely new systems with new business models and jobs, and workflows. AI will be no different: to truly unlock the potential of ChatGPT, the world will need new and different kinds of organisations”.

Chatbot market’s size

In a report titled, ‘Global Chatbot Market: Growth, Trends, Covid-19 Impact, and Forecasts (2023-2028)’, published a few months before the launch of ChatGPT, by Mordor Intelligence, divided the global chatbot market into two segments:

* End-user vertical (BFSI, healthcare, IT & telecommunication, retail, travel & hospitality);

* Geography.

The report valued the global chatbot market at USD 3.78 billion in 2021, and it was projected to register a CAGR of 30.29 per cent over the forecast period 2022-2027. It observed that the vendors, globally, were making significant product innovations by integrating technologies such as AI and NLP to cater to customer needs and market requirements. The other significant observations were:

The market was primarily driven by the rising domination of messenger applications and increasing demand for customer analytics.

Due to the increasing use of messenger applications, integration of chatbots with messengers yielded a higher return on investment, as approaching the customers on their preferred application improved user experience. Moreover, messenger applications allowed chatbots to save users’ chat history for future purposes to personalise the user experience and gain actionable insights.

The messaging app usage statistics of January 2022 showed that WhatsApp has 2,000 million active monthly users, followed by WeChat (1,263 million monthly active users), and Facebook Messenger (998 million monthly active users). Chatbots with the ability to reasonably mimic humans allow brands to engage consumers more efficiently on these growing messaging platforms.

With the outbreak of COVID-19, chatbots have been increasingly deployed by various organisations to respond to customer queries and other related information. As different organisations adopted remote working due to lockdowns, companies became heavily dependent on chatbots to reduce the burden of customer queries due to minimal availability of customer service employees.

Marketing and sales teams were often under pressure to gain sales and constantly improve the customer experience. In contrast to traditional customer service, chatbots were available around the clock, even when sales personnel fail to attend to customer queries. It was found that chatbots helped support customers without interruption of working hour limitations. Moreover, bots could easily handle a high number of requests and process them all simultaneously without ever being overworked. Thus, the availability of correct information without waiting periods helped enterprises boost consumer experience using chatbots.

The global chatbot market was highly competitive due to the presence of many small and large players. The market was concentrated, with the key players adopting strategies such as product innovation, to stay ahead of the competition. Some of the players in the market were IBM Corporation, eGain Corporation, Nuance Communications, Creative Virtual Ltd, and Avaamo Inc., among others.

Chatbots in the healthcare industry find their practical usage as they can maintain anonymity about the individual’s identity, especially in sensitive and mental health issues. It can track and monitor a user’s behaviour and anxiety to support the development of improved habits. It offers instant reactions, notifications, reminders, and the option to interact with multiple people. Depending on the application, personalisation can also be kept at a high level. Some applications use measurements of physical vitals (oxygenation, heart rhythm, body temperature) via mobile sensors, and facial recognition is used to track the behaviour of patients.

The Asia Pacific region witnessed the highest potential for the chatbot market due to rapid industrialisation. The increasing retail and e-commerce business in emerging economies such as China, India, Indonesia, Vietnam, Malaysia, the Philippines, Taiwan, and Thailand, accelerated the high demand and significant adoption of chatbots by retailers and e-commerce business owners.


Google, Microsoft, and IBM have recently laid off thousands of their employees to cut costs. Many other tech companies are also following suit. An early sign of the deflationary impact of AI is clearly visible. Before it gets pronounced, the International Labour Organisation (ILO) and other multilateral global organisations must take preventive measures to protect the livelihood of AI-impacted people. Moreover, it is high time that a regulatory body oversees the development of artificial intelligence and regulates its progress in the proper direction so that it doesn’t end up creating a monster that killed his own creator — a young scientist Victor Frankenstein, as described in Mary Shelley’s famous novel (1818) ‘Frankenstein; or, The Modern Prometheus’.

Views expressed are personal

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