Alphabet (GOOGL) said on Feb. 6 it would be opening up its new conversational artificial intelligence (AI) technology, called Bard, to public testing in the coming weeks.
Rival Microsoft (MSFT) had announced it would be using ChatGPT to enhance Bing search results, and Google was quick to respond.
But in an early look at Bard results, an error appeared with the technology.
Asked the question, "What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9 year old about," Bard gave a few answers. But one of them was incorrect.
"JWST took the very first pictures of a planet outside our solar system," the AI technology had written.
But the first image of such a planet had been taken in 2004, well before the JWST was launched in December 2021. Google shares slid about 8%.
Deepwater Asset Management managing partner Gene Munster said it was an overreaction on CNBC Feb. 9.
"'It was an overreaction,' says @munster_gene on yesterday's $GOOGL sell-off after its #ChatGTP competitor #Bard gave an incorrect answer at a demonstration. 'To make a decision that $GOOGL is behind the curve based on a demo is a little bit premature.'"
"How much of a gaffe was that?" asked CNBC's Andrew Ross Sorkin. "The stock did move lower, should it have?"
"Probably not as much," Munster said. "When I think of those kind of gaffes, I think of Tesla, Cybertruck, Elon Musk throwing the rock through it, it had that screeching effect. Ultimately, we was able to vector that into a positive direction. It's more difficult for Google to do that here."
Munster said there was an additional factor contributing to the selling of Google shares.
"There was another layer to the sell-off in shares yesterday," he said. "Microsoft's comments that they are going after search, that's a profitable business. I think the combination of the first negative read on how Google is doing with Bard along with that comment about the excitement that Microsoft has around Bing, I think it pushed shares down."
"I would add one piece that is just really surprising about the whole conversation around Microsoft and AI and Google, is that Google has invested far more into AI than Microsoft," Munster added.
"In 2017, Google changed their mantra from organizing the world's information to being an AI-first company," he continued. "They talked so much about AI machine learning."
"My point in saying that is that Google is not to be counted out when it comes to this AI race."
