To lend some perspective, the market cap loss sustained by Alphabet due to a single error from Bard’s end is in the same league as the overall dip in market cap suffered by Adani Group companies over two weeks of the Hindenburg-induced market rout
As the chatbot war between Google and Microsoft heats up, its effects have found its way to capital markets as well. On Wednesday, Google’s parent company Alphabet suffered market capitalisation loss amounting to $100 billion, roughly Rs 8 lakh crore, after Bard—Google’s answer to Microsoft’s ChatGPT—made a factual error in its promotional video.
Ever since Microsoft announced a $10 billion investment into ChatGPT’s parent company OpenAI in January, much of the tech-crazed world has been anticipating a Microsoft-Google showdown in the arena of AI-enabled chatbots. Micrsoft-backed ChatGPT did not take much time to become a head-turner in the tech world, racking up 100 million registered users within just two months of its launch.
In a way, Microsoft threw down the gauntlet with its ChatGPT investment and Google responded quickly. Earlier this week, Google announced that it will roll out Bard, a conversational bot powered by a ‘lightweight version’ of Google’s Language Model for Dialogue Application or LaMDA. Alphabet CEO Sundar Pichai also announced that the LaMDA technology will be integrated to Google’s core search engine business in the future. This was not surprising given that Microsoft had already made public its plans to integrate ChatGPT into its Bing search engine and Edge web browser.
For a very long time, Microsoft’s search engine has been a weak rival to market leader Google and the upcoming infusion of ChatGPT features into Bing was expected to give Microsoft a better shot at its Alphabet-owned rival. Now, the newly announced Bard will seemingly make the search engine battle a significant segment in the wider war for AI supremacy. However, there is no doubt that both the AI chatbots belonging to Microsoft and Google will have its weak moments, as Bard clearly showed in a promotional video recently shared by Google.
Bard’s $100 Billion Blunder
On Monday, Alphabet CEO Sundar Pichai wrote on his blog that Google will spend some more time on perfecting Bard before it will be released for the general public. While introducing Bard as ‘an important next step on our AI journey’, the blog post also included a short video that demonstrated Bard’s ability to simplify complex problems. But as it turned out, Google’s chatbot made a factual error.
In the video, the prompt given to Bard was: "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?" In response, Bard gave multiple answers, one of which suggested that the JWST was used to take the very first pictures of a planet outside the Earth’s solar system. This is factually incorrect, as pointed out first by Reuters.
Following this error, Alphabet lost $100 billion in market value on Wednesday. While the Google parent’s scrip fell as much as 9 per cent during trading hours, Microsoft’s shares rose around 3 per cent before giving in to some selling pressure. This episode sheds light on the high-stake nature of the AI war between the two tech giants. Just to lend some perspective, the market cap loss sustained by Alphabet due to a single error from Bard’s end is in the same league as the overall market cap loss suffered by Adani Group companies over two weeks of the Hindenburg-induced market rout.
OpenAI’s ChatGPT is not fool-proof either, having come under the scanner for giving out inaccurate and, at times, inappropriate answers to users’ queries. The difficulty in scaling the number of concurrent users is also something that both major chatbots have to figure out. It is clear that there is vast scope for improvement in the interactive chatbot segment and tech behemoths Google and Microsoft have made it evident that they want to achieve supremacy in this segment. In addition to the indigenous development of Bard, Google recently invested $300 million in the AI start-up Anthropic. This is on top of its existing stakes in Cohere and C3.ai.
The recent mass layoffs at Microsoft and Alphabet also fuelled concerns that the leading tech companies are going to shed extra costs in a bid to invest more in AI technologies. While announcing the layoffs, Alphabet CEO Pichai even clarified that the tech giant is going focus on its AI products henceforth.
As shown by Bard’s recent episode, the risks are immense in the AI space, but so are the opportunities. With other major players in the tech sector such as Meta, Amazon and Apple yet to make a grand announcement of their AI plans, it will be interesting to see how the battle to gain supremacy in AI technologies pans out in the coming months.