Shares of Google’s parent Alphabet tumbled more than 7% on
Wednesday after the company held an event that promoted its new artificial
intelligence chatbot called Bard, one day after competitor Microsoft held its
own event to show off new AI technologies in its competing search engine, Bing.
Google officially announced Bard on Monday, and the company
said it will begin rolling out the technology in the coming weeks.
During the event Wednesday, which was livestreamed from
Paris, Google executives discussed some of Bard’s capabilities. The
presentation showed how Bard can be used to display the pros and cons of buying
an electric car, for example, or to plan a trip in Northern California.
Bard is powered by the company’s large language model LaMDA,
or Language Model for Dialogue Applications. Google will open up the
conversation technology to “trusted testers” ahead of making it more widely
available to the public, the company said in a blog post Monday.
The event also showed AI improvements to a number of other
Google products, including Maps and Google Lens, which lets people search for
images from their phone’s camera.
Shares of Alphabet slid during the event, suggesting that
investors were hoping for more in light of growing competition from Microsoft.
Google’s event took place just one day after Microsoft hosted
its own AI event at its headquarters in Redmond, Washington. Microsoft’s event
centered around new AI-powered updates to the company’s Bing search engine and
Edge browser. Bing, which is a distant second to Google in search, will now
allow users get more conversational responses to questions.
The Microsoft product updates were built on technology from
ChatGPT-maker OpenAI, in which Microsoft has invested billions.
ChatGPT is AI software that generates text based on complex
written prompts. The web-based tool went viral after its debut in November,
prompting analysts and Google employees to ask whether the company was falling
behind in AI, an area which has been a core focus for Google for several years.
In response to ChatGPT’s popularity, Google declared an internal “code red” to
accelerate development of Bard and other AI products, and the company’s
co-founders, Larry Page and Sergey Brin, reportedly got involved again, years
after stepping down from day-to-day work at the company.
Though Microsoft’s latest AI investments increase the
pressure on Google search, some analysts say it will take time for Microsoft to
see any significant gains.
“Search improvements will act as a tailwind to [advertising
revenue long term], but it will take time to bring users back to Bing and they
will need a crowbar to pry away advertisers from Google,” Jefferies’ analyst
Brent Thill wrote in a Tuesday note. “We view these updates as the tip of the
iceberg for MSFT’s AI capabilities, with the largest opportunity in enterprise
use cases.”
An analyst at UBS said that if Microsoft hopes to overtake
Google, it has a “mountain to climb.”
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