AI Competition Heats Up, Alphabet Shares Drop

The newest innovations in artificial intelligence may offer a plethora of opportunities for the global tech sector, but one of the biggest names in the industry is seeing a decline in stock value following an AI blunder. Let’s take a closer look at the controversy surrounding Alphabet’s (GOOG) chatbot Bard:

Google’s AI Chatbot Slip-Up

Alphabet CEO Sundar Pichai caused a great deal of buzz recently with his Monday announcement that the firm’s response to the threat posed by ChatGPT would be released to the public in the coming weeks. According to some reports, top executives at the tech giant had been concerned that ChatGPT could cut into Alphabet’s highly profitable search engine branch. 

Some may have hoped that Alphabet’s AI chatbot, Bard, would help the company keep its competitive advantage in the internet search field. However, concerns about the technology’s accuracy may have sapped some of the excitement. (Source:Bloomberg)

In order to drum up enthusiasm for Bard, on February 6th  a GIF advertisement was posted to Google’s Twitter account showing the technology’s capabilities; however, inadvertently, the ad featured Bard delivering an incorrect answer to a query regarding astronomy. Bard informed the user in the advertisement that the James Webb Space Telescope captured the first images of planets beyond our solar system, which is patently incorrect, as such pictures had been previously taken in 2004.

Some observers posit that the rush to stay abreast of the competition led to Bard being presented to investors before all of its bugs were ironed out. Perhaps in response, traders pushed Alphabet’s share price down by more than 7% over the course of the day Wednesday. This drop comes on the heels of a partial recovery in the firm’s stock value seen over the past month following 2022’s whopping 38.7% decline.

Competition Heats Up

Alphabet’s rushed response to the prospect of increased competition in the internet search market may have come as no surprise to those following developments in the field. Industry peer Microsoft (MSFT), one of the main financial backers of ChatGPT developer OpenAI, also unveiled new innovations to the public this week.

On Tuesday, the latest version of Microsoft’s search engine, Bing, was announced by CEO Satya Nadella. It was revealed to the public that this update would be powered by artificial intelligence similar to that which underpins ChatGPT. Nadella went so far as to liken the efforts to integrate AI into search engine functions as a ‘race’, and some have even been wondering if Microsoft’s technological advances could lead to the firm taking a bite out of Alphabet’s market share. Over the past two trading sessions, Microsoft shares have risen by nearly 4%, capping off an overall more than 11% rise since New Year’s. (Source:The Guardian)

Big Tech has faced significant economic headwinds, as both Microsoft and Alphabet have announced cuts to their payroll. The outcome of the competition in Big Tech over who will be able to harness the power of advances in artificial intelligence to power internet searches is still undetermined. What is certain is that traders and investors alike will need to follow developments closely in order to stay abreast of market trends.