Alphabet Inc lost $100 billion in market value on Wednesday after its new chatbot provided incorrect information in a promotional video and a company event failed to impress, fueling concerns that Google’s parent firm is losing momentum to competitor Microsoft Corp.
During regular trading, Alphabet shares fell as much as 9%, with volumes roughly three times the 50-day moving average. After a few hours, they had reduced their losses and were nearly level. Despite losing 40% of its value last year, the stock has gained 15% since the beginning of this year, excluding Wednesday’s losses.
Reuters was the first to spot an inaccuracy in Google’s advertising for chatbot Bard, which launched on Monday, regarding which spacecraft was the first to photograph a planet outside the Earth’s solar system. Google has been hot on the heels of OpenAI, a firm backed by Microsoft for approximately $10 billion, which debuted software in November that has impressed consumers and become a fascination in Silicon Valley circles for its remarkably accurate and well-written responses to simple queries.
Google’s live-streamed presentation on Wednesday did not offer any information regarding how and when Bard will be integrated into its basic search function. Microsoft staged an event the day before, emphasizing the fact that it had previously provided to the public a version of its Bing search with ChatGPT functions integrated. Google, situated in Mountain View, California, discovered Bard’s inaccuracy soon before the presentation.
“While Google has been a pioneer in AI innovation over the last many years, they seem to have fallen asleep on incorporating this technology into their search engine,” said Gil Luria, senior software analyst at D.A. Davidson. “Google has been scrambling over the previous few weeks to catch up on Search, which caused the announcement yesterday (Tuesday) to be rushed and the embarrassing gaffe of posting the wrong answer during their presentation.”
Microsoft shares increased roughly 3% on Wednesday and were unchanged in after-hours trading. Alphabet tweeted a brief GIF video showing Bard in action, saying that it would help demystify complex concepts, but instead provided an incorrect response.
In the advertisement, Bard is asked, “What new discoveries from the James Webb Space Telescope can I teach my 9-year-old about?” Bard responds with a number of solutions, one of which is that the JWST was used to take the first images of a planet outside the Earth’s solar system, or exoplanets. However, the first images of exoplanets were captured by the European Southern Observatory’s Very Large Telescope in 2004, as confirmed by NASA.
This emphasizes the necessity of a thorough testing procedure, which we’re launching this week with our Trusted Tester programme,” said a Google spokeswoman. “We’ll combine external feedback with our own internal testing to ensure that Bard’s solutions reach a high standard for quality, safety, and grounding in real-world data.”