I/O 2023 Conference: Can Google Win the AI Race?

On Wednesday, Google’s parent company, Alphabet (GOOG) rose by 4%, perhaps recouping some of the losses the tech sector incurred in the past couple of months as big tech stocks had to grapple with rising inflation and higher Fed interest rate hikes.

The rise is attributed to Google’s I/O event, during which the tech giant revealed its latest AI developments and business strategies. So what is Google’s I/O event exactly, what was revealed about Artificial intelligence, and what is the company’s business outlook in the near future? Here’s what drove Alphabet upward on Wednesday:

What Is Google’s I/O Event?

Every year, Google hosts its I/O event, which is a developer-focused event that showcases the company’s latest technological advancements and news. The conference features live-streamed keynote presentations and learning materials along with technical sessions for developers. This year, the I/O conference took place on Wednesday, May 10th at the Shoreline Amphitheater, in California. (Source:Google)

What Did Google Announce in I/O 2023?

Some of the key highlights from yesterday’s conference were the following:

• New Pixel Smartphones and Tablet:

One of Google’s biggest announcements was the release of Android’s latest version in which privacy, performance, and security improvements were key focuses. In addition, new gadgets were introduced and AI features will also be added to the smartphone. For example, Magic Compose, a new AI feature, will generate text in response to messages.

The company also announced its new version of Pixel 7a which runs on Android 13 and is considered more affordable than its predecessor. This smartphone too, supports AI features. Google also released its Pixel Fold phone and Google Pixel Tablet.

• Bard:

Google’s Bard has certainly made the headlines numerous times in the past couple of months as OpenAI’s ChatGPT made an ostensible buzz in the markets and caused many big tech companies to shift their focus to the AI field. 

As such, Google’s parent company was no exception. Google announced that Bard, which is powered by the new version of its language model, PaLM 2, is now available to everyone. It was also revealed that Bard has undergone some improvements including mathematical calculations, coding, reasoning, and writing poetry and stories along with other features like drawing and illustrating. The chatbot will also be linked to Google’s partners or apps like Kayak and Instacart.

• Gemini:

Google also revealed that it would compete with ChatGPT through its new language model, Gemini. Gemini is expected by many to overtake ChatGPT as it has unique features and multimodal capabilities. This means that while ChatGPT can currently only comprehend text as it is a text-based model, Google’s Gemini’s multimodal capability allows it to understand and create text, images, and codes. 

• More AI tools:

AI has made its way to Google Search and to tools like Google Docs, Sheets, and Meet which will help write emails and create images for Google Slides. The company also said that it would provide AI-focused results in its search experience and will give its customers the ability to narrow down the results through follow-up questions.

Alphabet Stock Update: A Brief Recap of Its Trajectory

While the abovementioned advancements have certainly put Alphabet back in the forefront and drove its share price upward on Wednesday, it is yet to be determined whether or not the tech behemoth will be able to sustain this growth. 

This is because it is no secret that Alphabet not only had to face economic headwinds like inflation and recession fears which usually drive away some investors from inflation-sensitive tech stocks but also because it had to deal with rising competition from companies like Microsoft (MSFT) which has invested heavily in ChatGPT and integrated it into its Bing search engine. 

Alphabet even had to resort to layoffs back in January, as it announced that it would cut 6% of its workforce in an attempt to face the economic downturn all while shifting its focus and resources on AI advancement. Nonetheless, despite the economic pressure, so far, the company was able to rise by 25.2% since the beginning of the year. On the flip side, rival Microsoft has surged even higher throughout the year as it gained 30.3% since the beginning of the year up till now. 

While the answer to who will win the AI race is yet to be determined and the markets are as certain as ever, there are some that seem to hold the belief that Microsoft and ChatGPT’s stardom may soon be over as Alphabet might take the AI lead, especially after yesterday’s conference.

In addition, traders may want to keep in mind that Microsoft and Google are not the only companies in the AI race, as other companies like Intel (INTC) and AMD (AMD) among others may also be seeking AI glory. 

As such, traders may want to keep track of any AI advancements to come and also bear in mind the economic factors that may drive AI stocks upward or downward. For example, inflation, reports like the CPI, or earnings releases from other companies in the tech field can play detrimental roles in stock prices.