Updated February 26, 2024, 4:14 PM EST
top line
Google’s parent company Alphabet lost about $90 billion in market value on Monday as a controversy over the Silicon Valley giant’s generative artificial intelligence products spilled over to Wall Street.
important facts
Alphabet shares fell 4.5% to $138.75 on Monday, closing at their lowest since Jan. 5 and marking the company’s second-largest single-day loss of last year.
The drop comes after a series of controversies surrounding Google’s Gemini AI service, including allegations that Gemini’s image generation service produces racially inaccurate depictions of historical figures. In the end, the company announced that Gemini’s initial deployment He admitted that taking the AI imaging service offline for the next few weeks “missed the mark.”
“This is a major blunder in the surrounding PR battle.” [generative AI] And it further suggests that Google is lagging behind and mismanaging a fast-moving, high-stakes space,” Loop Capital analyst Rob Sanderson said Sunday. wrote in a note to customers.
Alphabet’s losses came as major stock indexes were flat on a relatively uneventful day of trading, resulting in the biggest decline among stocks in the S&P 500, which has a market capitalization of more than $50 billion.
important quotes
“The issue of stock prices is not a debate.” [over Gemini] As such, it is a recognition of the truth behind the brand,” Melius Research analysts Ben Reitz and Nick Monroe wrote in a note to clients on Monday. “Regardless of your views, if Google is seen as an untrustworthy source of AI for some people, that’s bad for business,” the analyst continued.
Main background
If Alphabet jumps into the “crosshairs” of the culture war debate, it could challenge its stranglehold on the online search market, Melius Group says, with AI’s burgeoning role in online search and “an important segment of the user base.” The hypothesis was formulated taking into account the possibility that[ing] I’m concerned about Google’s illusions and bias. ” Gemini’s obvious bias is Alphabet’s recent blunder in the AI arms race, in which rival Microsoft appears to be in pole position. Alphabet famously lost more than $100 billion in market capitalization on the day it announced its AI chatbot service in February last year because a press release contained factual errors by the service.
amazing facts
Alphabet shares have fallen 1% since the beginning of the year, lagging the S&P’s 7% rise, the tech-heavy Nasdaq’s 8% rise, and double-digit gains for rivals like Microsoft and Meta.
References
follow me twitter. Send us a safe tip.
