ChatGPT: A Disruptive Innovation or A Bubble Set to Burst?

ChatGPT: A Disruptive Innovation or A Bubble Set to Burst?
Case Code: ITSY138
Case Length: 13 Pages
Period: 2018-2023
Pub Date: 2024
Teaching Note: Available
Price: Rs.500
Organization: OpenAI
Countries: United States
Themes: Information Systems, Innovation, Ethics in Information Technology,Disruption
ChatGPT: A Disruptive Innovation or A Bubble Set to Burst?
Abstract Case Intro 1 Case Intro 2 Excerpts


The case discusses the emergence of ChatGPT as a groundbreaking technology in the generative AI space. Developed by San Francisco-based AI research and deployment company OpenAI, ChatGPT uses machine learning algorithms to generate human-like text based on input prompts. The case explores the growth of ChatGPT and how it represented a new era in conversational AI. The chatbot, capable of responding to prompts in a human-like manner, disrupted many industrial and professional sectors such as healthcare, finance, media/journalism, and education with its versatile capabilities which included content creation, language translation, business automation, powering virtual assistants, coding, supporting customer service and sales, research and development, education and training, creating legal documents, etc. ChatGPT reportedly garnered over 100 million monthly active users in just two months of its launch, which made it the fastest-growing consumer application ever.

Despite being considered a disruptive innovation by some experts, there were severe challenges ChatGPT had to grapple with. Users complained that it was prone to giving biased or incorrect answers as it merely produced output based on its training data. Some experts said that ChatGPT interactions could potentially involve sensitive user data and its misuse might compromise privacy or result in data breaches. ChatGPT also raised concerns over plagiarism, copyright infringement, and job displacement. OpenAI, the parent company of ChatGPT, continued to burn cash at an alarming rate with costs of about US$700,000 per day to run ChatGPT. Globally, the popularity of ChatGPT began to wane as was clear from the fact that desktop and mobile traffic to the ChatGPT website decreased by 9.7% in June 2023 compared to May 2023, and the number of unique visitors to the website dropped by 5.7%.

The biggest challenges for OpenAI going forward lay in arresting the decline in the user base of ChatGPT, enhancing user privacy, and ensuring that ChatGPT was used in a responsible and ethical manner. While some analysts were optimistic about the future of ChatGPT, others felt that it was a bubble waiting to burst.


The case is structured to achieve the following teaching objectives:

  • Understand the concept of Artificial General Intelligence (AGI).
  • Understand disruptive innovation in the AGI sector
  • Study the applications and limitations of ChatGPT.
  • Identify the challenges and risks associated with disruptive technology adoption
  • Frame strategies and approaches that OpenAI can adopt to overcome drawbacks and ethical considerations of ChatGPT



Disruptive Innovation; Artificial General Intelligence (AGI); Disruptive Technology; OpenAI; ethical AI; Bubble Burst; Generative AI Model; Technology; Product development.

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