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Chat GPT - Understanding the Inner Workings, Magic of Generative AI

February 14, 2023 6 min read

AI, that can write like Shakespeare and talk like your best friend - thanks to Chat GPT, it’s now a reality.

Developed by OpenAI, a research laboratory co-founded by Elon Musk and Sam Altman, Chat GPT is an AI-powered communication tool that can generate natural and engaging conversations with relevant & contextual Replies in seconds.

If you ask a question to Chat GPT, it will respond with a helpful answer. If you need it to get more specific and complete a task, such as creating a summary or writing a poem - it will provide you with the most appropriate result, and that too, in just a couple of seconds.

It is no wonder then, that Chat GPT gained 1 million users in just 5 days of its launch globally.

Imagine completing a task in 2 minutes which would have otherwise taken 2 days!

In such a short span of time, Chat GPT has democratized AI for anyone by providing a platform that has the power to create automated conversations, generate insights and automate tasks.

So what is Chat GPT exactly - let's peel down the layers!

What is Chat GPT?

OpenAI's Chat GPT is a software tool that takes a piece of language (an input) and generates a response based on what it thinks would be the most helpful for the user. To put it simply, it takes the input and uses it to generate a new, related output in line with the user's context.

Chat GPT can generate any kind of language-based output, from answering questions to summarizing long texts, translating languages, writing essays, taking memos, and even coding.

In fact, in one demo, Chat GPT was used to create a replica of the Instagram app using Figma, a popular software tool for app design in merely seconds. This shows how powerful GPT chat can be and the potential it has for creating innovative digital solutions.

It is achieved through the pre-training process, where a vast amount of text data is used to teach the algorithm how to comprehend language and its associated structures. This is known as unsupervised learning, as there is no information in the training data to define what is a “correct” or “incorrect” response.

To learn how to generate language constructions, it uses semantic analytics to study how words and their meanings interact with each other when used in a sentence or phrase, which enables it to calculate the probability of its output being what the user needs.

This is, of course, pretty revolutionary, and if it proves to be effective over time, it could have a major impact on the development of software and apps going forward.

Even though many people know how it works, there are many who still don't know “how it does” what it does.

Today, we will be talking about how Chat GPT really works and will also dive deeper into its algorithms, challenges, and how it's going to affect the future of AI.

How does Chat GPT work?

The Chat GPT model is trained in three stages.

  • First, it is trained to understand the context of a conversation by recognizing patterns in the conversations.
  • Next, the model is trained to generate natural language responses by recognizing the intent behind the user’s input to generate a response that is appropriate for the user’s context.
  • Lastly, the model is trained to generate responses that are unique and personalized for each user.

The model uses a combination of supervised and unsupervised learning techniques to generate natural language responses.

The model is trained using a large set of conversational data that includes both conversations between people as well as written dialogues from books, movies or other sources. This allows the model to learn the context of conversations and understand what is being said. The more data the model is trained on, the more accurate it will be.

How Chat GPT uses Natural Language Processing and Sentiment Analysis

Chat GPT uses NLP and sentiment analysis to understand user queries, extract the meaning from them, and generate natural, human-like responses. The technology offers a wide variety of features and capabilities, from understanding text in various languages to understanding the sentiment of a conversation.

For example, if the sentiment of the query is positive, the response will be more encouraging and positive. If the sentiment of the query is negative, the response will be more neutral and factual.

At the heart of Chat GPT is its deep learning model. This model consists of a sequence of layers, including a word embedding layer, a recurrent neural network (RNN) layer, and a transformer layer. The word embedding layer takes words from the user query, converts them into numerical vectors, and stores them in a matrix.

The RNN layer then takes the matrix of word vectors and passes them through a neural network to generate a response. Finally, the transformer layer takes the output of the RNN layer and uses it to generate a natural-language response.

The combination of NLP and sentiment analysis in Chat GPT allows it to generate accurate, human-like conversations.

The Transformer Architecture - BERT

Chat GPT uses the Transformer Architecture - BERT (Bidirectional Encoder Representations from Transformers) to create natural language generation (NLG) models for chatbots.

The Transformer architecture is based on transformer blocks, which are composed of a multi-head attention mechanism, a feed-forward network, and a residual connection.

The Transformer architecture uses a sequence of inputs to calculate the contextual relationships between the elements in the sequence. It is done by using a set of so-called "attention heads" which are attention-based layers that take the input sequence and map it to a context-aware representation.

The result is a powerful language model which can be used for a variety of natural language processing tasks, such as language modeling, question answering, and text summarization.

The multi-head attention mechanism can capture long-range dependencies between words, allowing the model to understand the context of the sentence and generate an appropriate response.

The feed-forward network consists of two linear layers, one for processing and transforming the input, and the other for generating the output. Lastly, the residual connection helps the model learn and take into account the context of the previous layers.

Data Labeling - A Critical Building Block of Chat GPT

Data labeling is essential in training Chat GPT because it helps the model learn the correct responses to user input. Labeling data allows the model to differentiate between different types of input and know how to respond accordingly.

To begin with, the labeled data is used to train the model via machine learning, which includes assigning labels to words, phrases, and conversations.

Then, the model is tested on a dataset that is not labeled. This helps to verify how well the model performs.

Finally, the model is evaluated on a dataset with labels to see how well it performs when predicting labels.

The process of data labeling for Chat GPT is quite similar to other machine learning algorithms. However, it is important to note that Chat GPT requires more data labeling than other models because the model is more complex and requires more data points to accurately predict labels.

Challenges of using Chat GPT

Despite the potential of Chat GPT, there are still some challenges that need to be addressed to fully realize its potential.

Biased data
The data used to train the model is often biased due to the corpus of data that is available. For instance, if Chat GPT is trained on biased data, such as data that contains gender, racial, or age-based stereotypes, it may generate responses that reflect such biases. Moreover, if the language used in the conversations is not neutral (e.g. using gendered language), the generated responses may also be biased.

Limited by the quality of its training data
Chat GPT models are only as good as their training data. If the data is of low quality, then the model will be limited in its ability to generate conversations that are relevant and convincing. As such, obtaining quality training data is a key challenge for Chat GPT.

Limited by the context of the conversation
Chat GPT models can generate conversations that are natural and convincing, but they can only do so within the context of the conversation.

If the conversation changes topics or contains references to topics that the Chat GPT model has not been trained on, then it will not be able to generate a convincing response.

Limited by the computational power of the device they are running on
The larger the requirement of the model, the more resources it will require to run. If the device does not have enough computational power, then the model will not be able to generate convincing conversations.

Limited by their inability to connect to real-time data
Chat GPT models are trained on existing data which is restricted till 2021, but they are not able to learn new information from new data.


To sum it up, ChatGPT is a powerful conversational artificial intelligence tool that enables users to create, train, and deploy AI-powered conversational experiences.

With its natural language processing and deep learning techniques, it makes conversations between humans and machines more natural and engaging.

However, right now, Chat GPT requires a lot of computing power and resources to generate conversations. As the technology matures, it will become more efficient and require less computing power to generate conversations.

Microsoft, one of the early backers,  has announced plans to invest up to $10 billion in OpenAI, and integrate with its Office suite and Bing, thereby achieving its goals of providing more personalized experiences and insights to its customers.

The potential of Chat GPT is vast, and only a testament to the rapidly evolving AI space.

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