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Alphabet Shares Dip After Bard Answers A Query Incorrectly: Report

The AI-based chatbot, which is in the testing phase debuted on Monday to simplify difficult topics. It was said to be made available to the public in the coming weeks

Alphabet Shares Dip After Bard Answers A Query Incorrectly: Report
POSTED ON February 09, 2023 1:12 PM

Alphabet Inc., Google's parent, suffered a loss of $100 billion in market value on Wednesday, ater its experimental chatbot, Bard, shared inaccurate information in a promotional video and at a company event. The incident failed to impress those present at the function and also fueled concerns that the search giant is losing its edge to its rival, Microsoft Corp, which is banking on OpenAI's ChatGPT.

Alphabet's shares declined by as much as 9 per cent during the regular trading session with the volume being three times the 50-day moving average. However, the losses were trimmed after-hours and the stock was roughly flat. The stock had lost 40 per cent of its value last year, but had rallied 15 per cent since the beginning of the year, excluding Wednesday's losses.

The error in Google's advertisement for Bard was first reported by Reuters.

The chatbot debuted on Monday and was launched to simplify complex topics. However, it delivered an incorrect answer to a question in the advertisement. In the ad, Bard was asked, "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?" Bard replied with several answers, one of which was suggesting that the JWST was used to take the very first pictures of a planet outside the Earth's solar system, or exoplanets. However, NASA confirmed that the first pictures of exoplanets were taken by the European Southern Observatory's Very Large Telescope (VLT) in 2004.

Google's presentation on Wednesday morning, which was live-streamed, did not include details about how and when it would integrate Bard into its core search function. The day before, Microsoft held an event where it showcased that it had already released a version of its Bing search with ChatGPT functions integrated. Just before the presentation, Google was informed of the error in Bard's information.

"While Google has been a leader in artificial intelligence (AI) innovation over the last several years, they seem to have fallen asleep on implementing this technology into their search product," said Gil Luria, senior software analyst at D.A. Davidson. 

"Google has been scrambling over the last few weeks to catch up on search and that caused the announcement yesterday (Tuesday) to be rushed and the embarrassing mess-up of posting a wrong answer during their demo," he added.

Microsoft's shares rose around 3 per cent on Wednesday, and were flat in post-market trading.

Alphabet is facing a tough time, following a disappointing fourth quarter where advertisers cut spending. The search and advertising giant is moving quickly to keep pace with OpenAI, a start-up that Microsoft is backing with around $10 billion, and its other rivals. It has reportedly brought in its founders, Sergey Brin and Larry Page, to accelerate its efforts.

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