Following Google’s A.I. Event, Alphabet Shares Drop 7%

Google shares Alphabet Closed down by more than 7 percent on Wednesday, after the company An event was held Bard was the new chatbot for artificial intelligence. This came just one day after Microsoft hosted its own event to showcase new AI technologies in Bing, its rival search engine.

Official Google Homepage Bard Announced On Monday, confirm CNBC’s previous reportingThe company stated that it would begin rolling out the technology within the next few weeks.

Google executives spoke about some of Bard’s capabilities during the livestreamed event in Paris on Wednesday. Bard can be used by Google executives to show the pros and cons to buying an electric vehicle, or to plan trips in Northern California.

Bard is powered in part by LaMDA’s large language model, which is the Language Model for Dialogue Applications. Google will make it possible to use its conversation technology. “trusted testers” In advance of making it more widely accessible to the general public, the company stated in a blog post Monday.

It also showcased AI improvements to several other Google products such as Maps and Google Lens. These allow people to search for images directly from their phone’s camera.

Alphabet shares dropped during the event. This indicates that investors were looking for more due to growing competition from Microsoft.

Google’s event happened just one day following. 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.”

Analysts at Evercore said there was “little incremental news” from Google’s event, which may have contributed to the falling stock price. The analysts said they believe this was an early and a “perhaps rushed” look at the AI Google has been working on for years.

Even so, the analysts said they believe Google’s AI technology is “at least as good” as its competition.

“Leveraging its years of AI investment (which drove a near doubling of CapEx in 2018) and unparalleled scale, this should help the company defend its market position in the long run,” they wrote in a Wednesday note.

— CNBC’s Jennifer Elias and Michael Bloom contributed to this report.