Most investors understand that artificial intelligence is going to be a huge long-term growth driver in the tech industry. Experts predict AI will completely revolutionize the economy and the world, making companies more efficient and ultimately more profitable.
At this point, AI is in its infancy. But a handful of tech companies are already offering digital assistants, AI helpers that answer questions and perform simple tasks for users. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) all have popular AI digital assistants on the market.
As any GOOGL stock investor knows about the online advertising business, the company that jumps out in front in a particular technology tends to ride that first-mover advantage for years or even decades. It’s still early to determine which company will ultimately dominate the market when it comes to AI personal assistants. But investors should pay close attention to who is winning the AI horse race.
Loup Ventures recently pitted three of the top AI personal assistants head-to-head in a performance test. AI will eventually perform all kinds of complicated functions — the Loup Ventures test was simply to see which assistant could meet the practical needs of today’s users.
Loup asked Alphabet’s Google Assistant, Apple’s Siri and Amazon’s Alexa AI assistants 800 questions. It then scored each assistant based on both their comprehension and ability to answer questions correctly. Loup’s questions were simple, practical questions not designed to trick the AI software. Instead, Loup was attempting to reflect the type of general questions real users would ask. For example, “Where is the nearest coffee shop?”
Good News for Alphabet Stock
Loup has conducted this competition several times before, and each time they have gotten a similar result.
“Google Assistant was the top performer in four of the five categories but fell short of Siri in the Command category again,” Loup Ventures analysts Gene Munster and Will Thompson said.
Google Assistant was the only AI assistant that correctly understood 100% of the 800 questions. It was also the only assistant that correctly answered at least 90% of them. Google Assistant correctly answered 92.9% of the 800 questions. Siri understood 99.8% of questions and answered 83.1% correctly. Alexa understood 99.9% of questions but answered only 79.8% correctly.
The analysts said the results were consistent with past tests.
“Many of the same trends continue; Google outperforms in information-related questions, Siri handles commands best, and the ranking of utility based on the number of questions answered has remained the same (Google Assistant, Siri, Alexa), but there have been dramatic improvements on each platform and in each category in the few short years that we have been tracking the progress of digital assistants,” Munster and Thompson said.
Not only was Google Assistant the top performer, it was also the most improved from Loup’s last test. Google Assistant’s percentage of correct answers was up 7% from 13 months ago. Siri’s accuracy was up 5%, while Alexa’s was up 18%.
Long Way to Go
Alphabet stock investors would love to declare Google the winner in AI technology. Loup Ventures warned against reading too much into the results.
“Today, they are able to understand, within reason, everything you say to them, and the primary use cases are well built out, but they are not generally intelligent,” Munster and Thompson said.
Obviously, AI is is going to be big money for the next decade or two, so this is bullish news for GOOGL stock. But all of these assistants have a long way to go. Yes, this market is wide open and massive. But companies don’t need AI to tell them where the nearest coffee shop is. AI has a lot of fine-tuning ahead before it can approach the level of creativity, critical thinking and decision-making that humans do on a daily basis.
The good news for Alphabet stock is that Google Assistant is off to a great start. If Google ultimately becomes the gold standard of AI, the potential upside for GOOGL stock price will be massive.
As of this writing, Wayne Duggan did not hold a position in any of the aforementioned securities.