During regular trading, Alphabet shares fell as much as 9%, with volumes nearly tripling the 50-day moving average.
Alphabet Inc’s market worth decreased by $100 billion on Wednesday as a result of its new chatbot providing false information in a promotional video and a lackluster corporate event, fueling concerns that the Microsoft Corp. rival is gaining distance on Alphabet Inc.
During regular trading, Alphabet shares fell as much as 9%, with volumes nearly tripling the 50-day moving average. After hours, they reduced their losses and were nearly flat. With Wednesday’s losses excluded, the stock has gained 15% since the start of this year after losing 40% of its value last year.
Google’s advertising promoting the chatbot Bard, which made its debut on Monday, contained a factual error concerning which satellite captured the first images of a planet outside of our solar system. This error was first discovered by Reuters.
Just before the presentation, Mountain View, California-based Google found Bard’s inaccuracy.
Alphabet promised on Twitter that a brief GIF video showing Bard in action would help to explain complex subjects, but it instead provided an incorrect response.
“What recent findings from the James Webb Space Telescope (JWST) can I share with my 9-year-old?” is the advertisement’s prompt for Bard. Bard offers several responses, one of which claims that the JWST was used to capture the first images of exoplanets, or worlds outside the solar system. But as NASA has confirmed, it was the Very Large Telescope (VLT) of the European Southern Observatory that captured the first images of exoplanets in 2004.
After OpenAI, a company Microsoft is investing $10 billion in, unveiled software in November that amazed users and became a craze in Silicon Valley circles for its shockingly accurate and well-written responses to straightforward questions, Google has been reeling.
Google did not get into specifics regarding how and when it would integrate Bard into its primary search function during its live-streamed presentation on Wednesday morning. Microsoft announced at an event the previous day that a ChatGPT-integrated version of their Bing search had already been made available to the public.
On Wednesday, Microsoft stock increased by almost 3%; in after-hours trade, it remained unchanged.
According to Gil Luria, senior software analyst at D.A. Davidson, “Google has been a pioneer in AI research over the last many years, but they seem to have fallen asleep on applying this technology into their search engine.” Google has been rushing to catch up on Search over the past few weeks, which resulted in the announcement on Tuesday being made in a hurry and the humiliating gaffe of releasing the incorrect response during their presentation.
A Google spokeswoman said, “This emphasizes the need for a thorough testing procedure, something we’re launching off this week with our Trusted Tester programme.” “To ensure that Bard’s responses reach a high standard for quality, safety, and groundedness in real-world knowledge, we’ll combine external feedback with our own internal testing.”
As advertisers reduced their expenditures, Alphabet had a poor fourth quarter.
With founders Sergey Brin and Larry Page apparently joining to speed up its efforts, the search and advertising powerhouse is purportedly moving swiftly to stay up with OpenAI and competitors.
According to King Lip, chief strategist at Baker Avenue Wealth Management, which holds Alphabet and Microsoft shares, “people are starting to wonder if Microsoft is going to be a significant rival now versus Google’s truly bread-and-butter business.”
However, Lip emphasized that worries about Alphabet might be exaggerated, stating that “Bing is still a long, far cry away from Google’s search powers.”
After corporate commitments to scale back on ostensibly “moonshot” projects and tens of thousands of job cutbacks in recent weeks, the new ChatGPT software has sparked optimism in technology corporations. According to Reuters, AI has taken over the minds of tech CEOs, who have cited it up to six times more frequently on recent earnings calls than in previous quarters.
The allure of AI-driven search is that it might produce results in plain language as opposed to a list of links, which might speed up and improve surfing. What effect that might have on targeted advertising, which forms the basis of search engines like Google, is still unknown.
Inherent biases in chatbot AI systems pose hazards for businesses because they can skew findings, sexualize photographs, or even plagiarise, as users of the service have found out.
For instance, Microsoft published a chatbot on Twitter in 2016 that shortly started producing racist messages before being taken down. Additionally, a CNET news site AI was discovered to write pieces that were either factually wrong or plagiarised.
The Bard advertisement had been seen more than a million times on Twitter as of the time of writing.