Alphabet Inc (GOOGL.O) shed $100 billion in market value on Wednesday after its new chatbot Bard shared incorrect information in a promotional video and a company event failed to impress, fueling concerns that the Google parent is losing ground to rival Microsoft Corp (MSFT.O).
Alphabet shares slipped as much as 9% during regular trading with volumes close to three times the 50-day moving average. They lowered losses after hours and were almost flat. The stock had shed 40% of its value in 2022 but surged 15% since the start of 2023, excluding Wednesday’s losses.
Reuters was the first to identify an error in Google’s advertisement for chatbot Bard, which debuted on Monday, about which satellite first snapped pictures of a planet outside the Earth’s solar system.
Google has been closely behind OpenAI, a startup Microsoft is backing with around $10 billion, unveiled software in November that has wowed consumers and become a fascination in Silicon Valley circles for its surprisingly accurate and well-written responses to simple prompts.
Google’s live-streamed presentation on Wednesday morning failed to incorporate details about how and when it would embed Bard into its core search function. A day earlier, Microsoft hosted an event touting that it had already unveiled to the public a version of its Bing search with ChatGPT functions integrated.
Bard’s error was noticed just before the presentation by Google, based in Mountain View, California.
“While Google has been a leader in AI innovation over the last several years, they seemed to have fallen asleep on implementing this technology into their search product,” said Gil Luria, senior software analyst at D.A. Davidson.
“Google has been scrambling over the last few weeks to catch up on Search and that caused the announcement yesterday (Tuesday) to be rushed and the embarrassing mess up of posting a wrong answer during their demo.”
Microsoft shares gained about 3% on Wednesday, and were flat in post-market trading.
Alphabet shared a short GIF video of Bard in action via Twitter, vowing it would help simplify complex topics, but it instead delivered an incorrect answer.
Bard is an experimental conversational AI service, powered by LaMDA. Built using our large language models and drawing on information from the web, it’s a launchpad for curiosity and can help simplify complex topics → https://t.co/fSp531xKy3 pic.twitter.com/JecHXVmt8l
— Google (@Google) February 6, 2023
In the advertisement, Bard is given the prompt: “What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?” Bard responds with several answers, including one indicating the JWST was used to take the very first pictures of a planet outside the Earth’s solar system or exoplanets. The first pictures of exoplanets were, however, taken by the European Southern Observatory’s Very Large Telescope (VLT) in 2004, as confirmed by NASA.
“This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program,” a Google spokesperson said. “We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a high bar for quality, safety, and groundedness in real-world information.”
Bard IS A Formidable Competitor
Alphabet is emerging from a disappointing fourth quarter as advertisers slashed spending.
The search and advertising titan is moving hastily to keep up with OpenAI and rivals, reportedly bringing in founders Sergey Brin and Larry Page to speed up its efforts.
“People are starting to question is Microsoft going to be a formidable competitor now against Google’s really bread-and-butter business,” said King Lip, chief strategist at Baker Avenue Wealth Management, which holds Alphabet and Microsoft shares.
Lip warned, though, that concerns about Alphabet may be exaggerated, saying:
Buy Bitcoin Now“I think still Bing is a far, far cry away from Google’s search capabilities.”
The new ChatGPT software has injected excitement into technology companies after tens of thousands of layoffs in recent weeks and executive pledges to cut back on so-called moonshot projects. AI has become a fascination for tech executives who have referred to it as much as six times more often on recent earnings calls than in previous quarters, Reuters found.
The appeal of AI-driven search is that it could cough up results in plain language, instead of in a list of links, which could make browsing quicker and more efficient. It remains unclear what effect that might have on targeted advertising, the cornerstone of search engines like Google.
Chatbot AI systems also carry risks for corporations because of built-in biases in their algorithms that can distort results, sexualize images or even plagiarize, as consumers testing the service have come to learn. Microsoft, for instance, launched a chatbot on Twitter in 2016 that quickly started generating racist content before being shut down. And an AI used by news site CNET was found to create factually inaccurate or plagiarized stories.
At the time of writing, the Bard ad had been watched on Twitter over a million times.
