#385: OpenAI Will Integrate DALL·E 3 With ChatGPT, & More

Last week, OpenAI announced[1] plans to release DALL·E 3, the third iteration of its text-to-image model, this October.[2] While DALL·E 2 and competitors Midjourney and Stable Diffusion all use a simple input-to-output interface, OpenAI has integrated DALL·E 3 into ChatGPT to help users generate AI images in a conversational format. The integration should enable[3] natural language queries of text-to-image models that are more open and useful than those offered by Midjourney. We wonder if integrating DALL·E 3 into ChatGPT also will enable superior image iteration and brainstorming compared to the “zero-shot” method of inputting and adjusting prompts repeatedly to generate desired image outputs.

DALL·E 3 seems to create more accurate images than competing text-to-image models. In the image below, for example, it generated coherent words instead of the gibberish typical from other models.

Source: OpenAI. 2023. “DALL·E 3.” A vintage travel poster for Venus in portrait orientation. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

Looking forward to more details upon its general release in October, we are excited about DALL·E 3’s potential—both as a productivity tool and as a pathway to new consumer entertainment options.

Based on our updated model, the performance of electric vehicle (EVs) has improved meaningfully. Our research suggests that “Charging Rate”—or the number of miles of range added per minute[4]—is the best measure of EV performance, as it captures the efficiency, power, and range of electric vehicles. That said, it is a less useful indicator of EV adoption, as most charging takes place at home.

Based on our modeling, EV performance should continue to increase relative to price, trending toward the gray line in the chart below, as battery costs continue to fall in line with Wright’s Law.[5] In other words, range should increase relative to price points.

Last week, the Food and Drug Administration (FDA) met to discuss[6] the ethics, applicability, and regulatory concerns associated with the potential of artificial wombs to increase the survival of babies born prematurely. In the United States, the number of “preterm births”—defined by the World Health Organization (WHO) as births that occur before 37 weeks of gestation—has increased from 9.6% in 2015  10.5% in 2021, as shown below. Globally, the number of preterm births in 2020, the latest data point available, was 13.4 million.^[7]

Source: March Of Dimes. 2023. “2022 March Of Dimes Report Card For United States.” Cited in Feeding Matters. 2023. “Premature Births On The Rise, Leading to More Pediatric Feeding Disorders.” For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

Scientists are making strides in this important research, prompting discussions at the FDA. Researchers at both the University of Michigan and the Children’s Hospital of Philadelphia (CHOP), for example, have created and tested artificial womb technology on lambs.

Recently, University of Michiganscientists devised[8] a method for pumping blood through an oxygenator, as illustrated below, which extended the life of a lamb for two weeks.

Source: Kozlov, M. 2023. “Human Trials Of Artificial Wombs Could Start Soon. Here’s What You Need To Know.” Nature. Image adapted from De Bie, F. R. et al. 2020. “Artificial placenta and womb technology: Past, current, and future challenges towards clinical translation.” Prenatal Diagnosis. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

Scientists at the Children’s Hospital of Philidelphia (CHOP) developed[9] a “bio-bag” that functions as an artificial womb and allows blood to be pumped first through the umbilical arteries and then back through the umbilical vein, as shown below, extending the lives of eight lambs for up to four weeks.

Source: Kozlov, M. 2023. “Human Trials Of Artificial Wombs Could Start Soon. Here’s What You Need To Know.” Nature. Image adapted from De Bie, F. R. et al. 2020. “Artificial placenta and womb technology: Past, current, and future challenges towards clinical translation.” Prenatal Diagnosis. For informational purposes only and should not be considered investment advice or a recommendation to buy, sell, or hold any particular security.

We are looking forward to more research on the safety and ethical considerations associated with artificial wombs, as well as the causes of and treatments for preterm labor and births.

A recent Harvard Business School[10] study found that GPT-4 boosted strategy consultants’ performance and speed by 40% and 25%. If quality and speed were considered equal measures of productivity, then GPT-4 increased the consultants’ productivity 1.75x—or 75%—over the control group, which had no access to GPT-4. This 1.75x increase suggests that artificial intelligence (AI) is well on the way to achieving ARK’s long-term estimate of a 4.5x increase in knowledge worker productivity by 2030.

Focused on the activity of 758 BCG (Boston Consulting Group) consultants, the study also highlighted that the performance boost was higher for lower-skilled than higher-skilled consultants: ~43% versus 17%, respectively. In addition, consultants trained to use GPT-4 performed even better, highlighting the utility of proper prompt engineering. Interestingly, the study also demonstrated that consultants using GPT-4 scored lower on tasks deemed beyond the frontier of GPT-4’s current capabilities. Why? Apparently, they trusted the AI more than they should have.

Together, these findings suggest that generative AI should boost knowledge worker productivity materially over time—and that lower-skilled labor could become more competitive with top talent, potentially lowering knowledge worker compensation relative to where it might otherwise be heading.

While the study highlighted the current limitations of large language models, the performance gains associated with an upgrade from GPT-3.5 to GPT-4[11] clearly demonstrated that the capability of language models is improving rapidly.

Last week, Ford highlighted[12] its use of Markforged’s continuous carbon fiber 3D printed parts for robotic “pick and place” grippers, which has resulted in savings of ~$3.2 million thus far. Ford anticipates that 3D printing will impact 20% of its general parts inventory, reducing total inventory costs by 10%, or $100 million.[13] Ford has based those estimates on its existing tooling and spare parts, but creating end-use parts from scratch with 3D printing is likely to lower costs much more.

As the auto industry shifts from gas-powered, personally driven cars to all-electric robotaxis, 3D printing could be crucial in the transition.[14] ARK estimates that the 3D printed  end-use product opportunity is worth ~$500 billion,[15] 30x the current market.

[1] David, E. 2023. “OpenAI releases third version of DALL-E.” The Verge. [2] DALL·E 3 will be released to ChatGPT Plus and Enterprise subscribers, just one year after the release of DALL·E 2, with API access to follow. [3] OpenAI. 2023. “DALL·E 3.” [4] Environmental Protection Agency. 2023. “Fuel Economy and EV Range Testing.” [5] ARK Investment Management LLC. ND. “What Is Wright’s Law?” [6] Christensen, J. 2023. “FDA advisers discuss future of ‘artificial womb’ for human infants.” CNN. [7] Kozlov, M. 2023. “Human Trials Of Artificial Wombs Could Start Soon. Here’s What You Need To Know.” Nature. [8] Kozlov, M. 2023. “Human Trials Of Artificial Wombs Could Start Soon. Here’s What You Need To Know.” Nature. [9] Kozlov, M. 2023. “Human Trials Of Artificial Wombs Could Start Soon. Here’s What You Need To Know.” Nature. [10] Dell’Acqua, F. et al. 2023. “Navigating the Jagged Technological Frontier: Field Experimental Evidence of the Effects of AI on Knowledge Worker Productivity and Quality.” Working Paper 24-013. Harvard Business School. [11] OpenAI. 2023. “GPT-4.” [12] Markforged. 2023a. “Markforged 2023 Investor Day.” [13] Markforged. 2023a “Markforged To Host 2023 Investor Day.” [14] The Fabricator. 2021. “Michigan shop is binder-jetting first part for a GM production vehicle.” [15] This ARK forecast is based on underlying data from external sources, which may be provided upon request. Data as of September 22, 2023. See also ProtoLabs. 2023. “3D Printing Trend Report 2023.”