A selloff of Alphabet Inc shares knocked $100 billion in market value from Google's parent company on Wednesday after its new artificial intelligence chatbot "Bard" shared inaccurate information in a promotional video, fueling worries the world's third largest tech company by market value is losing ground to rival Microsoft Corp.
Halfway through the session, Alphabet is down, while Microsoft was flat.
Alphabet shares slid nearly 9% at one point, while Microsoft shares jumped around 3% before paring gains. Reuters was first to point out an error in Google's advertisement for chatbot Bard, which debuted Monday, about which satellite first took pictures of a planet outside the Earth’s solar system.
A Google spokesperson responded saying "This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program."
"We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a high bar for quality, safety and groundedness in real-world information," the spokesperson added.
Google has been on its heels after OpenAI, a startup Microsoft is backing with around $10 billion, introduced software in November that has wowed consumers and become a fixation in Silicon Valley circles for its surprisingly accurate and well-written answers to simple prompts.
Alphabet is coming off a disappointing fourth quarter as advertisers pulled back on spending from the highs of the pandemic when more consumers shopped online as a result of lockdowns and travel restrictions.
The search and advertising giant is moving fast to keep pace with OpenAI and rivals, reportedly bringing in founders Sergey Brin and Larry Page to accelerate its efforts. Investors apparently remained unconvinced.
Following last year’s disaster in Big Tech, shares for Google and Microsoft are up roughly 12% each in 2023, after rising approximately 8% and 14% the last month, respectively.