CHATGPT: The Rise

The rise of ChatGPT has been one of the most significant Black Swan events in the history of technology. Following its debut, ChatGPT quickly gained recognition as potentially the most rapidly expanding app in history, amassing an estimated 100 million monthly users within two months. In comparison, Facebook required approximately four and a half years to reach 100 million users after its 2004 launch. Twitter surpassed this mark in over five years, and Instagram achieved it in just over two years.

The wild part is that they have retained users each week. At its inaugural developer conference in November, OpenAI CEO Sam Altman revealed that ChatGPT has reached a weekly user base of 100 million people and 1.5 billion monthly website visitors.

Since launching its ChatGPT and Whisper models through an API in March, the company now has more than two million developers on board, encompassing over 92 percent of Fortune 500 companies.

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NVIDIA: Dominates The Market

The massive hype generated by ChatGPT and other related generative AI technologies has spurred institutions and retail investors to invest heavily in AI chipmakers. By far, the biggest stock story of the year is Nvidia. Not only has Nvidia's stock market value crushed it, but its revenue has exploded this year as well. To put this in perspective, their revenue for 2022 was $26.9 billion. In 2023, they are projected to end the year with over $50 billion in revenue.

The stock is UP almost 250% YTD, which is insane for a blue-chip stock. On top of that, they have reached a market cap of over one trillion dollars, making them one of four companies with a trillion-dollar valuation.

BANKS: A Huge Failure

The escalation of interest rates was a critical factor in the collapse of Silicon Valley Bank on March 10, 2023, and Signature Bank on March 12, 2023, significantly undermining depositors' confidence in the banking system. This loss of confidence had widespread effects, even reaching the EU, where Credit Suisse faced a downfall and was subsequently acquired by UBS Group on March 19. In the U.S., First Republic Bank was severely impacted.

Despite receiving a $30 billion boost in April, it succumbed on May 1, leading to its acquisition by JPMorgan Chase, a transaction that stands as the second most significant bank failure in the history of the United States.

The Flash Crash 💰

This event forever changed how the stock market works, lasting less than 10 minutes.

Imagine it's May 6, 2010. Suddenly, the Dow Jones Industrial Average plummets in a mere five minutes, erasing nearly a trillion dollars in market value. The market then inexplicably rebounds almost as rapidly as it fell. This unprecedented event sent shockwaves through the financial world, leaving experts and casual observers scrambling to understand what had just unfolded.

At the heart of this financial whirlwind was the complex and often misunderstood world of high-frequency trading (HFT). These are computer-driven trading algorithms designed to execute orders at speeds unfathomable to the human trader. On that fateful day, these algorithms interacted with each other in unforeseeable ways and initiated a rapid chain reaction of sell orders. The market, heavily reliant on this automated system, experienced a cascade of selling, leading to a drastic plunge.

Following the Flash Crash, analysts and economists debated the implications. This event brought to light the hidden vulnerabilities of a market deeply entangled with advanced technology. The Flash Crash was a stark reminder of the potential dangers and unpredictabilities inherent in a financial system dominated by high-speed, automated trading. It challenged regulators and market players to reconsider and revise their strategies to safeguard against such technological anomalies.

In response to this event, regulatory bodies implemented new safeguards, like 'circuit breakers' that temporarily halt trading during periods of extreme volatility, to prevent a recurrence of such a crash. These halts are used regularly when a stock has breaking news.

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