GPT technology operates in natural language processing (NLP) by leveraging a transformer-based architecture that enables it to generate human-like text. It is trained on vast datasets, learning to predict the next word in a sequence based on context and previous words. This allows GPT to understand and generate coherent responses, facilitate conversations, and complete tasks involving text. Its ability to generate contextually relevant content makes it valuable in applications such as chatbots, content creation, and language translation.