Last night the Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) stock price sank 7.4%, vaporising around A$144 billion worth of market capitalisation. The debilitating fall followed a glaring error from the tech giant’s recently announced AI service.
Investors were not forgiving after the mistake, erasing the equivalent value of CSL Limited (ASX: CSL) from the search engine provider. In turn, Alphabet shares finished the day at $100 neat — still 11.5% above their starting price this year.
It’s a ‘Bard’ look as Bing brings the heat
The rapid adoption of ChatGPT has piqued the interest of tech giants, and Microsoft Inc (NASDAQ: MSFT) was quick to join forces with OpenAI — the maker of ChatGPT — announcing a partnership last month.
Clearly, Microsoft is not playing around with making the most of the deal, with the company integrating AI directly into its search engine, Bing.
Not one to be outdone, Google also revealed its own AI implementation in search dubbed Bard. Much like Bing, the feature is meant to allow searchers the ability to ask questions in a conversational manner and return results produced by AI.
However, one of the company’s first displays of the technology has cast doubt on Bard’s usefulness and accuracy. The hiccup has taken a significant toll on the Alphabet stock price in the aftermath.
In a demonstration shared via Twitter, Google queried Bard for James Webb Space Telescope (JWST) facts for a 9-year-old. Impressively, three various dot points of information are swiftly supplied. But, it was quickly ridiculed for serving up false information — sending the Alphabet stock reeling.
Contrary to the AI’s statement, the JWST did not take the first image of a planet outside of our solar system. An accolade, instead, held by the European Southern Observatory’s Very Large Telescope.
A headwind for Alphabet stock
The stumble by Alphabet leaves a level of uncertainty around the dependability of the company’s honeypot, search.
If Microsoft’s partnership with OpenAI is able to deliver a better search experience, this could put pressure on Alphabet’s all-important ad revenue.
Over the past year, the Alphabet stock price has fallen nearly 30%. Meanwhile, Microsoft shares have slipped by 14.3%.
