Microsoft chat GPT: investors overreacted to Microsoft’s ChatGPT threat to Google
After Google’s chatbot answers the question about satellites incorrectly, Alphabet shares drop €93 billion in value.
In a promotional video, Google’s chatbot Bard made a mistake that caused Alphabet shares to lose $100 billion last week.
Investors in Alphabet, the parent company of Google, are alarmed by the threat posed by ChatGPT, the artificial intelligence (AI) phenomenon that is sweeping the tech industry. ChatGPT is supported by Microsoft. After Google’s chatbot, Bard, made a mistake in a promotional video last Wednesday, Alphabet shares saw a $100 billion (€93.4 billion) decline in market value.
Although it was a disastrous beginning for Bard, some people questioned whether the $100 billion mistake or the exuberant market reaction was to blame. One strategist claimed, “People aren’t even looking at the basics.” According to Evercore analysts, Google’s AI technology is “at least as good” as its rivals’. In the long run, Google would “protect its market dominance.” Others echoed the analysts’ cautionary advice, but on Thursday, shares fell another 5%.
Aside from the initial reaction, one may comprehend the worries of investors. While Google’s search business continues to be extremely important, accounting for around half of its profits, Microsoft has diversified its revenue streams. Although Google has controlled this market for years, Microsoft’s integration of ChatGPT into its Bing search engine suggests that it may finally challenge Google for market share. Even if Google triumphs in the AI battles, the increased effectiveness of AI searches will lead to fewer user inquiries and, thus, lower revenue. We shall see if investors overreacted last week, but Google’s future appears less clear than it did before.