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What is ChatGPT used for, exactly — and how does it work? Here's everything to know

If you're wondering about the AI tool everyone's buzzing about, you're not alone.

In the past few decades, communication technology has evolved at an incredible pace. The latest innovation making headlines? ChatGPT, the AI-powered large language model, developed by OpenAI. Users are using ChatGPT to do everything from being more productive to helping find diagnoses for medical conundrums.

“Microsoft’s $10 billion investment into Open AI thrust generative AI into the spotlight last January," explains Amy Farley, director of research operations, Pulse Labs, a software company that has recently been conducting research on how people are using ChatGPT and other generative AI tools. "Although AI has been around for years, the technology behind generative AI like ChatGPT makes it much more accessible to anyone with a smartphone or computer.

She adds that as a society, people have quickly learned how to use these tools everywhere from work and school to their personal lives.

And on Sept. 25, the New York Times reported that OpenAI has released a version of ChatGPT that will allow users to ask the tool questions and receive spoken answers, much like one would use Apple's Siri, or Amazon's Alexa. The Times also reported that the new version of Chat GPT has the capability to respond with photos and images.

But if you're still wondering "What is ChatGPT?" exactly, and need a little guidance on how it works and how to use it in your life, below is an overview of the ever-evolving ChatGPT world and what to know about the high-tech chatbot. 

What does ChatGPT stand for?

“As Google has become the way people describe searching the Internet, ChatGPT has quickly turned into the shorthand for how people use AI,” says Tom Taulli, the author of various books about AI, including Generative AI: How ChatGPT and Other AI Tools Will Revolutionize Business. But what does the name stand for, exactly?

ChatGPT stands for “Chat Generative Pre-trained Transformer.” It’s a mouthful, we know, hence most people shortening the name of the tool to “ChatGPT.” As of September 2023, ChatGPT-3.5 is the basic model on offer. Currently, you can use a basic version of ChatGPT for free at chat.openai.com, or update to ChatGPT Plus for $20 a month for access to ChatGPT-4, the latest model with the fastest response speed.

As Taulli points out, OpenAI had no marketing for the launch of ChatGPT in November 2022, and had little expectations for its success. It seems seems the runaway hit is only just getting started in the AI landscape. 

So...what is ChatGPT good for?

How does having a virtual companion you can depend on to answer questions, provide information and assist with writing tasks sound? ChatGPT can do all that and more, whether you work at a Fortune 500 company using it as a tool for customer support or you’re a small business owner using it for language translation, code generation or to create marketing materials. 

In simple terms, per Farley, ChatGPT is a chatbot that can take human language, put it into an artificial intelligence system, and transform a mountain of information into a clear, organized, and nearly human-sounding response.

To date, Pulse Labs has conducted research with over 500 AI users, finding that 86% of AI users are confident in using AI to draft important work documents, though many say they do have to review and edit the content before sharing it. The software company has also seen that 21% of AI queries are asking for advice, with “people using ChatGPT or other AI tools as a first step to get ideas when they aren’t sure what to do,” says Farley.

Taulli urges individuals to think of ChatGPT as their virtual assistant. “It can understand natural language input — or prompts — from the user,” he says. “But it can do more than answer questions. It can summarize text, write computer code, spin up poems, write music, create tables, and translate languages, just to name a few. 

However, it's important to not rely on AI-based tools for things in which you need to be 100% factually correct, warns Marc Cenedella, founder of career website TheLadders and Leet Resumes, an AI-based resume writing service. While ChatGPT works quite well as a starting point to brainstorm and outline ideas, it’s not always fully accurate.

“Open AI, the company behind ChatGPT, claims that their goal is to ensure that artificial intelligence benefits all of humanity,” Farley adds, explaining that, like any new technology, there are still plenty of bugs and kinks. Farley also highlights the fact that a mission-driven company took such a large investment from Microsoft is a fascinating move, and the Redmond, Washington, based tech giant is already incorporating ChatGPT’s software into Bing, Microsoft Office, and other tools. “It’s still too early to tell how Microsoft’s involvement with Open AI will impact the future of ChatGPT, or if this means that there will be limits to how other companies can use the technology,” she adds.

But how does ChatGPT actually work?

For those who are curious about how the technology functions, ChatGPT takes questions users type in, then tokenizes that information, summarizes Farley. “This means that it breaks the requests down into smaller pieces that help it understand the relationships between the words in the question. Then, it analyzes the tokens to understand grammar, syntax, and semantics, as well as context from previous questions in the conversation,” she says.

Next, ChatGPT compares the context to its knowledge base of information that’s been collected from a variety of sources, and as soon as it connects the context of the user’s question to the information in its knowledge base, it starts generating a text response, token by token, says Farley. (This is why, Farley explains, when you ask ChatGPT a question, you see pieces of words show up one by one instead of one long, multi-paragraph response that appears all at once.)

“ChatGPT is a large language model. That means it analyzes text and learns how words typically flow, then uses that knowledge to predict text in the future,” Cenedella says, likening it to the predictive text you’d see when typing a message on your phone on a much larger scale. “Rather than predict a single word, it predicts entire sentences, paragraphs, or even pages. In some cases, we’ve seen people write entire books,” he adds.

What are some ChatGPT alternatives?

More and more ChatGPT alternatives are being unveiled and gaining traction. Cenedella shares that Anthropic (a company founded by ex-OpenAI employees) created Claude, which is billed as producing safer and more ethical outputs relying on more up-to-date data than ChatGPT.  And right now, Google Bard and Microsoft’s Bing AI are two other big players. 

Farley comments that Bard and Bing both have access to search capabilities, so they will return links and images similar to a Google or Bing search. In Pulse IQ research, Farley and her team have seen that ChatGPT 4 (the paid version) consistently performs highest, with Bard and ChatGPT 3.5 (the free version) a close second. 

Alright, but...how accurate is ChatGPT, really? 

Taulli says it remains to be seen how accurate ChatGPT is, and other experts are on the same page. “OpenAI has not provided extensive details on this,” says Taulli. “However, we do know that ChatGPT has been trained on data as of September 2021. So it cannot accurately provide answers to recent events or knowledge.”

In many arenas, ChatGPT can be quite off, such as in the case of mathematics. “Try this prompt: 'What is 108,000,183 multiplied by 198?' You will get the wrong answer,” says Taulli, noting that ChatGPT does not have a math engine.

Echoing Taulli, Farley says ChatGPT’s accuracy depends on what you’re asking and who you are asking. “For general information and ideas, it’s mostly highly accurate. As you start asking more specific or contextual questions, it starts to run into issues,” she says. “In particular, specifics around writing code, understanding dates, or making calculations can throw it for a loop,” she continues, elaborating that occasionally, ChatGPT may completely make up information in an attempt to satisfy a user’s question.  

False information is a big concern, of course, even if it’s only happening infrequently. Cenedella references an August 2023 Stanford and UC Berkeley study that found that ChatGPT has become less accurate over time. “That means users must check ChatGPT’s outputs when it comes to facts,” he says. “Inaccuracies and data hallucinations mean at least until the technology evolves, you should not rely on ChatGPT to produce factual information reliably.” 

At the end of the day, Farley stresses that ChatGPT and similar tools are just that: tools. “Like the typewriter, computer, and smartphone before it, it’s as good as the people using it and building it,” says Farley. “It’s great to help cut down the time it takes humans to do work, but in most cases, it’s not accurate or nuanced enough to provide information that’s usable without any human intervention.”

So before you trust a chatbot, continue to trust your noggin, folks.