What Is Generative AI?

By Anders Bylund – Updated Sep 14, 2025 at 11:07 PM EST

Key Points

Generative AI creates new content like text or images, yet lacks the full creativity of humans.
Investing in firms like Adobe or Microsoft, which use generative AI, may yield returns.
Consumers enjoy generative AI benefits but must be wary of its potential for misuse.

You have probably heard the term "generative AI" tossed around in tech circles or investment discussions. It's one of those buzzwords that seems to be on everyone's lips nowadays, starting when OpenAI released the ChatGPT tool in November 2022. But the name alone doesn't really explain what's going on, and there are many ways to look at this interesting toolkit. So, it's time to demystify this tech jargon.

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Artificial intelligence robots working in an office. — Image source: Getty Images.

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About the Author

Anders Bylund is a contributing Motley Fool media and technology analyst covering semiconductors, cloud computing, internet infrastructure, quantum computing, and streaming media. Previously, Anders was a systems administrator for Nielsen Technology and CSX, gaining hands-on experience with enterprise-class systems. He was also a freelance writer for Ars Technica, TIME, USA Today, CNN, WIRED, and AOL's Daily Finance. He holds a bachelor’s degree in English and a master’s degree in library and information sciences from Florida State University. He believes in coyotes and time as an abstract.

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Anders Bylund has positions in International Business Machines, Micron Technology, Netflix, Nvidia, and SoundHound AI. The Motley Fool has positions in and recommends Adobe, International Business Machines, Microsoft, Netflix, and Nvidia. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.