Google's AI Event Results in a Fall of 8% in Alphabet Shares

Alphabet's parent company, Google, dipped more than 8% Wednesday after it held an event to promote its new artificial intelligence chatbot, Bard, which is based on artificial intelligence. Microsoft's competitor, Bing, held its event the same day to show off the new AI technologies it is using for its competing search engine.

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Bard was officially announced Monday, confirming Trade Algo's reporting the day before. According to Google, the technology will be rolled out within the next few weeks following the company's announcement.

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At the event hosted by Google executives in Paris on Wednesday, which was live-streamed from the city, a few of Bard's capabilities were discussed. A presentation was given explaining how Bard can be used to show some of the advantages and disadvantages of buying an electric car, for example, or to plan a trip to Northern California based on the pros and cons.

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To power Bard, the company has developed a large language model called LaMDA, which stands for Language Model for Dialogue Applications. As part of the company's blog post published on Monday, Google has announced that it will open up the conversation technology to "trusted testers" before making it more widely available to the general public. In light of Microsoft's growing influence in the world of technology, Alphabet's shares slid during the event, which suggested that investors were hoping for more.

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One day before Google's AI event took place at its headquarters in Redmond, Washington, Microsoft's own AI event was being held at its headquarters in Redmond, Washington. This year's Microsoft event was centered on new AI-driven updates for Bing, Microsoft's search engine, and Edge, the company's web browser. Bing is now enabling users to get more conversational responses when they ask questions through their search engine, which is a distant second to Google. 

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It has been announced that the Microsoft product updates have been built on technology developed by ChatGPT maker OpenAI, in which Microsoft has invested billions of dollars.

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Using artificial intelligence, ChatGPT can generate text based on complex written prompts provided by users. As a result of its viral success after its debut in November, the web-based tool has prompted analysts and Google employees alike to wonder whether the company could be falling behind in the field of artificial intelligence, which has been one of the core focus areas for Google for some time. It was rumored that Google's co-founders, Larry Page, and Sergey Brin, re-engaged with Bard and other AI products in response to ChatGPT's popularity, and Google declared an internal "code red" in response to the popularity of ChatGPT, which accelerated the development of Bard and other AI products.

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It is a fact that Microsoft's latest AI investments increase the pressure on Google search, but some analysts claim that Microsoft will not see any significant gains for quite some time.

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“I believe that search improvements will act as a tailwind for [advertising revenue in the long run], but bringing users back to Bing will take some time, and it will take quite a bit of force to separate advertisers from Google, Jefferies' analyst Brent Thill wrote in a note on Tuesday. “Our view on these updates is that they are just the tip of the iceberg for Microsoft's AI capabilities, with the largest opportunity in enterprise applications."

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In the words of an analyst at UBS, if Microsoft wants to surpass Google, it has a “mountain to climb.”