Alphabet shares tank after chatbot Bard AI flub

[MongiIG]

Alphabet (GOOGL) saw $100 billion wiped off its market cap after its Google AI chatbot Bard flubbed an answer in an ad. What does this mean for the AI race and competitors like Microsoft (MSFT)?

 Angeline Ong | Presenter, Analyst and Content Editor, London | Publication date: Thursday 09 February 2023

Bard misfires

Alphabet shares tanked after its new AI chatbot Bard misfired on its debut.

Share price chart

Let's take a look at the impact on Alphabet shares first and look at that huge drop over there, that big red candle falling as much as 9%, wiping out some $100 billion of its market cap on Wednesday.

And look down here as well. Big volumes there can be seen almost three times the 50-day moving average.

Microsoft

Have a look at its peer, Microsoft as well in the AI space, because that is quite interesting there. As you can see, also similar volumes there. But Microsoft made a slight gain perhaps on that news.

So back to Alphabet. What was behind that big move? Well, Alphabet's chatbots in short answered a question wrong when asked which satellite first took pictures of a planet outside the Earth's solar system. While still, it did this in its first public demo, that's like tripping ahead of a race. An AI race, of course. Big news given AI tech has been hailed as the next big thing and related stocks like Alphabet, like Microsoft, have posted big gains recently.

Microsoft backs open AI behind chat GPT and Microsoft wants that tech to power its Bing search engine. But as the tech gets rolled out, its limitations are starting to come through and the race is not just about who comes out top dog in the AI race, but who gets it right.