On Wednesday, shares of Alphabet Inc., the parent company of Google, experienced a significant decrease in market value, losing over $100 billion. This was due to a misstep by the company's BERT chatbot advertisement, which presented inaccurate information.
Additionally, analysts noted that the AI search event put on by Google lacked key details on how the company plans to compete with Microsoft's ChatGPT.
Reuters was the first to bring attention to an error in Google's latest advertisement, which was launched on Monday. The advertisement contained incorrect information regarding the satellite that captured images of a planet beyond our solar system's reach. As a result, shares of Alphabet Inc., Google's parent company, saw a steep drop of 8 percent, or $8.59 per share, to reach a value of $99.05. This made Alphabet one of the most actively traded stocks on US exchanges. Also read: Top 8 Financial Tips for Adults, Never Ignore these
The technology giant, Google, announced the launch of its BERT chatbot through a short GIF video on Twitter. The video described the chatbot as a tool that would "launchpad for curiosity" and aid in breaking down complex subjects. However, just hours before the launch event in Paris, an error in the chatbot's response was discovered. Despite the company's efforts to present BERT as a reliable source of information, this inaccurate answer called into question its effectiveness.
According to Dennis Dick, founder and market structure analyst at Triple D Trading, "This is just a temporary setback, but it has had a significant impact on the stock's performance. The market's reaction is understandable, as everyone was eager to see what Google would come up with as a response to Microsoft's impressive product. It's justified that the stock is being affected."
The Google event took place a day after Microsoft announced its plan to integrate its AI chatbot, ChatGPT, into its Bing search engine and other products, presenting a significant challenge to Google's dominant position in search and browser technology.
In the advertisement, BERT was presented with the prompt, "What new discoveries from the James Webb Space Telescope (JWST) can I explain to a nine-year-old?"
BERT provided several answers in response to the prompt, one of which incorrectly stated that the JWST was used to capture the first images of exoplanets outside of our solar system. However, this claim was proven false by NASA, which confirmed that the European Southern Observatory's Very Large Telescope (VLT) captured the first images of exoplanets in 2004. Also read: Top 10 Best Stock Trading Platforms in Canada
In a statement to Reuters, a representative from Google acknowledged the mistake and emphasized the need for a thorough testing process. The spokesperson said, "This underscores the significance of having a rigorous testing process, which is something we are launching this week with our Trusted Tester program."
A Google representative stated, "We will merge external feedback with our own internal testing to guarantee that BERT's answers meet a high standard of quality, safety, and credibility based on real-world information."
The error was detected just before the Paris launch event, where a senior executive, Prabhakar Raghavan, promised that users would be able to interact with information in "completely new ways" using the technology.
During the presentation on Wednesday, Raghavan portrayed BERT as the future of the company and encouraged the audience to use generative AI to unleash their imagination in search. However, Gil Luria, a senior software analyst at investment bank DA Davidson, noted that Google had been scrambling to keep up with search technology in recent weeks, which led to a rushed announcement and an embarrassing error during the demonstration.