Shares of Google’s parent company, Alphabet, have plummeted at over 7% after the company held an event to promote its new artificial intelligence chatbot, Bard, according to a report by CNBC. This happened just one day after its competitor, Microsoft held its own event to show off its new artificial intelligence (AI) features in its search engine, Bing.
At the event, Google fumbled when its chatbot came up with inaccurate information in a promotional video. The ad showed an incorrect description of a telescope that was used to take the first images of a planet outside our solar system. The blunder resulted in Alphabet Inc losing US$100 billion in market value and seeing its stocks slide.
Google revealed Bard earlier this week alongside Microsoft which launched a new version of its search engine Bing in Beta, and web browser Edge powered by an upgraded version of the artificial intelligence (AI) technology that powers OpenAI’s chatbot, ChatGPT.
Bard is an artificial intelligence chatbot technology that Google plans to roll out in the coming weeks. The system is powered by Google’s Language Model for Dialogue Applications (LaMDA) and is a conversational AI service that seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language model, according to a statement by Google and Alphabet’s CEO, Sundar Pichai on its website. It reportedly draws on information from the web to provide fresh, high-quality responses, which is similar to ChatGPT which has the ability to produce well-researched content in seconds.
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During the event, Google showed off some of Bard’s capabilities including how it could be used to decide the pros and cons of buying an electric car, for example, or to plan a trip in Northern California.
The event also showcased the many of the AI improvements Google has made to a number of other Google products, including Maps and Google Lens.
However, investors were clearly hoping for more particularly with Microsoft’s launch happening so close to Bard’s and the stocks showing that they were largely unimpressed with its showing.
The news is certainly a blow for Google who has been ramping up its AI development since the launch of ChatGPT last year and following the announcement that Microsoft would invest US$1 billion into OpenAI, the company behind it. Google’s search business is projected to suffer greatly if they cannot outpace Microsoft’s AI-powered Bing.
Saying that, Google’s search business continues to remain strong for now with Search Engine Journal, a search marketing news site, reporting that Google has over 86% of the search market share. Bing on the other hand has a market share of about 25.7%, putting it at quite a disadvantage to Google currently. Additionally, Google has a number of advantages including the integration and ecosystem it has created within its services.
“It's not just about changing your browser or your search engine. Google has our passwords, bookmarks and documents. Google’s moat is that it has created a universe around the browser and it would take some effort from users to change their default ecosystem,” argues Kabeer Chaudhary, APAC managing director of M&C Saatchi Performance.
Having said that, Chaudhary adds that Bing will truly be a challenge to Google's dominance. How much would that be, would be dependent on how well Google's Bard AI works in comparison to Open AI's GPT3.
“The key point here is that Google is so heavily reliant on search revenue that even a few percentage points of market share being sucked out will have a dramatic effect on their bottom line,” he said.
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