Alphabet Shares Dive After AI Snafu

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Facts

  • Shares of Alphabet Inc., the parent company of Google, dropped by as much as 9% in regular trading Wednesday, losing approximately $100B USD following mishaps in the highly-publicized launch of its Artificial Intelligence (AI) chatbot, Bard.1
  • In a promotional video for the bot released on Twitter, Bard was asked what to tell a nine-year-old about the discoveries of the James Webb Space Telescope. In response, the bot incorrectly claimed the telescope was the first to take pictures of a planet outside of the earth's solar system, which was actually achieved by the European Very Large Telescope in 2004.2
  • At an event in Paris on Wednesday, Google outlined plans to use AI to change how people search online. The event came one day after Microsoft announced a revamped version of Bing, powered by a more advanced model of the AI behind ChatGPT.3
  • Google’s event was plagued by small errors within presentations often involving products still unavailable to the public.4
  • Currently, Bard — which is based on a large-language AI model that is based on the architecture of the human brain — is being worked on by a team of specialist testers.5
  • Dennis Dick, founder and market structure analyst at Triple D Trading, said Google experienced a 'hiccup,' and the market was 'severely punishing the stock for it.' A Google spokesperson said the mistake highlighted the 'importance of a rigorous testing process.”6

Sources: 1Reuters, 2BBC News, 3CNN, 4Ars technica, 5Guardian and 6Al Jazeera.

Narratives

  • Narrative A, as provided by Forbes. Google no longer provokes fear in its competitors because of its fraught past with AI technology, and the fact that many of its former employees are thriving while leading new startups. As with Amazon’s Alexa seven years ago, Google is playing catchup so there are bound to be hiccups along the way. Google has a fight on its hands if it’s going to retain its search dominance.
  • Narrative B, as provided by Independent. Google’s engineers are typically cautious when rolling out new projects, and AI is no different. Bard isn’t available to the public because the testers and technicians are still working out the kinks. Even if Google’s competitors’ AI proves to be better, it will be a tough road for those companies seeking to make a dent in the search market. After all, Google is the name synonymous with the word 'search.'

Predictions