Alphabet loses 100 bn dollars after their AI Chatbot gives wrong answer in their own ad

The share price was hit by fears that the search and advertising giant could lose competition to Microsoft in the search engine market, which is Alphabet's main source of revenue. Google launched its AI-equipped chatbot Bard on February 7.

In the past year, Alphabet's shares have fallen 30 percent, while in a six-month period they have fallen 15 percent. Still, shares rallied nearly 13 percent in a month, even after reporting disappointing earnings in the fourth quarter that ended in December, as advertisers cut spending amid fears of a recession. As part of its cost-cutting move, the company recently laid off about 12,000 employees in one of the biggest job cuts in the past year.

On Wednesday, shares of Alphabet opened lower at 102.05 dollars per share from its previous closing price of 107.64 dollars on the Nasdaq. During the session, tech shares fell 8.9 percent to an intraday low of 98.04 dollars on strong volume, which touched almost three times the 50-day moving average. The shares ultimately fell 7.68 percent to 99.37 dollars, wiping out more than 100 billion dollars of market value.

The sale of the company's shares was triggered after Reuters pointed out an error in Google's announcement hours before Bard's launch in Paris. In the Twitter post, a GIF shows a user asking Bard: "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old son about?" – to which the chatbot responded, saying that JWST took the first pictures of a planet outside our solar system. This is not true.

Google launched its AI-based chatbot Bard to keep up with its popular Open AI ChatGPT-3 language model because it's in no mood to give up the "crown" so easily. The development can be seen against the background of groundbreaking developments in text generation for AI in recent months, with OpenAI powered by Microsoft topping the chart in gaining popularity among developers, researchers, and enterprises. The popularity of newcomer AI systems like ChatGPT and DALL-E has really put Google ahead because, despite working in the AI field for years, they haven't released any fancy tools like this.

Bard's launch comes just days after Alphabet CEO Sundar Pichai announced that the company will soon create AI-powered templates with great languages, acting as a "search hero." Brad is a new experimental chat service from GoogleAI and is powered by LaMDA. LaMDA (Language Model for Dialog Applications) is a powerful AI model first released by Google in May 2021. It works on technology similar to ChatGPT.

Google's hype on the AI front is also gaining prominence following recent moves by another tech giant, Microsoft, which announced a "billion-dollar (approximately 10 billion dollars) multi-year investment" in the owner of ChatGPT. OpenAI, in January 2023, as it looks to commercialize advanced AI, technology into its corporate and consumer products. Prior to that, in 2019 and 2021, Microsoft invested over a billion dollars in the startup.