Alphabet Stock Plunge Erases $100 Billion After New AI Chatbot Gives Wrong Answer In Ad
Shares of Alphabet slipped on Wednesday after reports that promotional material for the Google parent’s new artificial intelligence chatbot contained inaccurate information—adding to concerns that competitor Microsoft may expand its footing in the search-engine market with a buzzy new AI-equipped offering.
Google shares fell nearly 8% to roughly $99.40 on Wednesday—erasing more than $100 billion in market value, including a nearly 5% uptick on Tuesday after the tech giant announced an AI-equipped service called Bard to compete with the popular ChatGPT bot.
The stock plunge worsened after Reuters reported Wednesday morning that a Twitter advertisement for the service, which generates answers for user queries and is debuting to a limited group of testers before a wider release, included inaccurate information.
In the Twitter post, a GIF image displays a user asking Bard, “What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?”—to which the service responds, saying the telescope “took the very first pictures of a planet outside of our own solar system.”
Despite the chatbot’s claim in the ad, NASA reports the first picture of a planet outside the Milky Way was taken by the Very Large Telescope in 2004—some 19 years before NASA’s Webb telescope.
“This highlights the importance of a rigorous testing process, something that we’re kicking off this week,” a Google spokesperson said in an email to Forbes, noting the testing process will combine external feedback with Alphabet’s own internal testing to make sure Bard’s responses “meet a high bar for quality, safety and groundedness in real-world information.”
Adding to potential concerns, Microsoft on Tuesday announced it would launch a new version of its search engine, Bing, utilizing the same technology underpinning ChatGPT to help inform user search queries—a move Wedbush analyst Dan Ives said should “challenge the Web search market by grabbing market share.”
Artificial intelligence technology has drawn massive fanfare from investors this year amid the growing popularity of ChatGPT, which launched in November and has helped its maker, OpenAI, nab a staggering $29 billion valuation. Alphabet’s Bard announcement came one day before Microsoft held a press conference to tout an investment in OpenAI that has helped shares of the Silicon Valley staple surge nearly 20% over the past month. “This is just the first step on the AI front,” Ives told clients in a note after the event, reiterating an outperform rating for shares.
Despite the apparent flub, Bank of America analysts have said they’re bullish on Google’s AI strategy, writing in a note to clients that Google is “well prepared with years of investment” in the technology to capture a significant part of the market, particularly since its search engine has a large distribution advantage, as compared to Microsoft. Nevertheless, the analysts warn safety issues including result inaccuracy or bias, disinformation and the potential use of models for harm are key risks.
“AI is the most profound technology we are working on today,” Alphabet CEO Sundar Pichai said as he announced the new chatbot this week.
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