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Alphabet Inc. experienced a loss of $100 billion in market value on Wednesday, due to a combination of factors. The new chatbot of the company shared incorrect information in a promotional video and the company event did not live up to expectations, which heightened concerns that Alphabet is falling behind rival Microsoft Corp.
Alphabet’s shares experienced a drop of up to 9% during regular trading with volume reaching nearly three times the 50-day moving average. The stock later recovered some losses and remained nearly unchanged. Despite losing 40% of its value in the previous year, the stock had rallied by 15% since the beginning of this year, before Wednesday’s losses.
Reuters was the first to report on an error in Google’s advertisement for its chatbot, “Bard,” which was launched on Monday. The error was related to the satellite that took the first pictures of a planet outside of Earth’s solar system.
Google has faced challenges since OpenAI, a startup backed by Microsoft with around $10 billion, introduced new software in November. The software has received positive feedback from consumers for its accurate and well-written answers to simple prompts and has become a hot topic in Silicon Valley circles.
Google’s promotional event on Wednesday failed to impress investors as it lacked information about the integration of its new chatbot, Bard, into its core search function. Meanwhile, rival Microsoft had already released a version of its Bing search with integrated ChatGPT functions, which was highlighted at their event the previous day. This has fueled concerns that Google is falling behind in the race against Microsoft.
Google’s recent mistake in the advertisement of its chatbot Bard and the subsequent failure to showcase its integration into the core search function during its presentation has resulted in investors losing confidence in the company.
The error and the lack of information has led analysts to believe that Google has been caught off guard by the rapid advancements in AI technology and has fallen behind its competitors, particularly Microsoft, which has been investing heavily in AI technology through its support for OpenAI. The error has been seen as a result of Google’s rush to catch up in the AI search space.
The video posted by Alphabet showing Bard’s capabilities backfired and led to a decline in the company’s stock value. The mistake in the video fueled worries that Google was losing ground to its rival Microsoft, which had already integrated its chatbot (ChatGPT) into its search engine Bing.
The lack of integration of Bard into Google’s core search function also raised concerns among investors. Microsoft’s stock, on the other hand, rose by around 3% on Wednesday due to these events.
The incorrect information in Bard’s response led to criticism of Google’s AI technology and fueled concerns that the company was falling behind its rival Microsoft, which has already integrated its ChatGPT functions into its Bing search. The misstep also came at a time when Google was trying to catch up in the integration of AI into its search product.
The error was widely noted by analysts and investors, leading to a 9% drop in Alphabet’s stock value during regular trading, with volumes nearly three times the 50-day moving average. The stock pared losses after hours and ended the day roughly flat.
The error in the advertisement for Google’s chatbot, Bard, has led the company to prioritize the testing process to ensure quality, safety and accuracy of its responses. Google has started its Trusted Tester program this week and plans to combine external feedback with its own internal testing to ensure that Bard meets high standards. A spokesperson from Google has emphasized the importance of a rigorous testing process.
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The competition in the AI industry is heating up, with Microsoft’s OpenAI being seen as a formidable competitor to Alphabet, the parent company of Google. This is causing concerns among investors, as Alphabet struggles with a decrease in advertisement spending and aims to keep up with OpenAI and its competitors. However, some analysts believe that these concerns may be overblown, as Bing is still far from matching Google’s search capabilities. Nevertheless, the pressure is on for Alphabet to accelerate its AI efforts, with company founders Sergey Brin and Larry Page being involved in the process.
The new ChatGPT software has generated interest in the technology sector after recent job cuts and a shift towards more practical projects. AI has become a focal point for tech executives, with more mentions in recent earnings calls compared to previous quarters. AI-driven search has the potential to produce results in simple language, making browsing faster and more efficient, but the impact on targeted advertising, which is the foundation of search engines like Google, is still unclear.
Yes, chatbot AI systems can carry risks for corporations due to biases in algorithms that can lead to skewed results, inappropriate content, or plagiarism. Examples of this include Microsoft’s Twitter chatbot in 2016 that generated racist content and an AI used by CNET that produced factually incorrect or plagiarized stories. These incidents highlight the need for rigorous testing and quality control processes to ensure chatbot AI systems meet high standards for quality, safety, and accuracy.
(“This story remains unedited by News360Express staff and is published from a syndicated feed.”)