Alphabet loses $100 billion in value as the launch of Google AI chatbot flops

Google’s parent company, Alphabet, saw its market value drop by $100 billion on Wednesday after its new chatbot, Bard, shared inaccurate information in a marketing video. Moreover, an event organized by the company to celebrate the launch of this chatbot did not go as planned.

Alphabet loses $100 billion in value

The shares of Alphabet also plummeted, with the trading volumes skyrocketing significantly. The stock plummeted by 40% last year, caused by a drop in the values of most shares of tech giants. However, the stock had started showing signs of recovery after rallying by 15% since the start of the year before the recent decline.

Google’s AI chatbot Bard made an error in a marketing video created by the tech giant. In the promotion, the chatbot was asked about the first satellite to capture images of planets outside the Earth’s solar system.

In the promotional video, Bard was asked, “What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?” The chatbot responded with several answers, one saying that the telescope was used to take the first pictures of planets outside the Earth’s solar system.

However, this answer was wrong because the images were taken European Southern Observatory’s Very Large Telescope (VLT) in 2004, as reported by NASA. The wrong answer dented the market’s hopes about an AI the search engine released.

Google competes against Microsoft

Google has been making an effort to compete against OpenAI, which is currently dominating the AI chatbot space since the release of ChatGPT. Microsoft recently backed OpenAI with around $10 billion. The popularity of the company grew in November after releasing the software.

Google is now seeking to compete against Microsoft to maintain its position as the largest global search engine. Google made a live-streamed presentation on Wednesday about this AI chatbot. However, the presentation did not have details about how Google will use the chatbot and when Bard will be integrated into the search engine.

A day before Google made this presentation, Microsoft had held an event where it said it had released a version of the Bing search engine to the public that had integrated the ChatGPT AI chatbot.

Analysts have expressed concern over the recent error by Bard. According to Gil Luria, a senior software analyst at D.A. Davidson, while Google was a leader in AI innovation in recent years, the company appeared to be lagging in adopting the chatbot technology in the search engine.

“Google has been scrambling over the last few weeks to catch up on Search, which caused the announcement yesterday to be rushed and the embarrassing mess up of posting a wrong answer during their demo,” Luria said.

On the other hand, Microsoft seems to be winning the AI race. The shares of the tech giant were up on Wednesday, with its massive investment in OpenAI raising investor prospects about the firm.