Editor’s Note: On Monday, February 20, the stock market will be closed for the Presidents Day holiday. The InvestorPlace offices and customer service department will also be closed on Monday. I hope you enjoy the long weekend!
A few weeks ago, I spoke about Microsoft Corporation’s (MSFT) partnership with OpenAI, the parent company of ChatGPT – a groundbreaking AI “language machine.”
Then last week, Alphabet Inc. (GOOG) announced its own AI chatbot: Bard.
Bard is set to perform a multitude of tasks, including “plan a friend’s baby shower,” “compare two Oscar-nominated movies,” and “get lunch ideas based on what’s in your fridge.” The chatbot is powered by Google’s language model LaMDA, or Language Model for Dialogue Applications. LaMDA is trained specifically in conversation dialogue.
So, it seems the race toward AI development is on – but Google is sprinting too fast toward the finish line.
Google’s CEO Sundar Pichai introduced the new project in a blog post on Monday, February 6. The company then held a relatively last-minute event on that Wednesday to showcase Bard. These exhibitions were the company’s rushed reactions to reports that Microsoft could be integrating ChatGPT into its Bing search engine – which was then confirmed at Microsoft’s own last-minute event held on that Tuesday.
However, because of Google’s mad dash to lap Microsoft, the company hit a hurdle during its rollout.
In a demo ad that appeared in Pichai’s blog post, a question is typed into the chatbot’s search bar: “What new discoveries from the James Webb Space Telescope can I tell my 9 year old about?”
The AI formulated this bulleted answer…
Impressive, informational… and inaccurate.
The third bullet that states that the James Webb Space Telescope took the first pictures outside of our solar system is not, in fact, true. While the JWST has taken pictures of planets outside of our solar system, it just wasn’t the first telescope to do so. The European Southern Observatory’s Very Large Telescope (VLT) was actually the first.
This error was caught just before Google’s event, with social media users condemning the company for not fact-checking Bard’s answers.
Google lost $100 billion in market value on Wednesday, February 8, following its event, and shares dropped 9% during the trading day. (Microsoft shares, meanwhile, rose by 3%.) This nosedive came days after the company announced disappointing fourth-quarter earnings.
But Google has no intention of forfeiting the AI race. While Bard isn’t available to the public yet, the company expects it to be in the coming weeks. Currently, the chatbot is undergoing internal testing with the company’s Trusted Tester program, in which selected Google Fiber customers test new products. Pichai also stated in his blog post that “external feedback” will be combined with the company’s internal testing to ensure that “Bard’s responses meet a high bar for quality, safety and groundedness in real-world information.”
The search engine giant has historically been wary of untested AI, recognizing that language models like LaMDA and GPT-3.5, which powers ChatGPT, can be prone to errors ranging from misinformation to biases. In another blog post on Google’s website, the company recognizes the responsibility of AI technology, saying that “language might be one of humanity’s greatest tools, but like all tools it can be misused.”
This is a problem ChatGPT is also currently facing.
The popular chatbot has been criticized for its potential use in allowing students to get away with cheating on exams and papers. To combat this misuse, OpenAI has developed a new tool called AI Text Classifier to help teachers determine whether a student or AI wrote an assignment. The tool gives examples of “human-written,” “AI-generated,” and “misclassified human-written” short answers. And when text is dropped into its text box, an answer corresponding to one of those categories is given. However, OpenAI cautions that this tool – like all AI – is not yet foolproof.
Now, while Microsoft and Google are trying to fine-tune their AI chatbots, another competitor has entered the fray: Alibaba Group Holding Limited (BABA).
On February 8, Alibaba, a Chinese multinational technology company, announced that will launch its own chatbot tool and is currently working on internal testing. The company has not announced when this chatbot will be available, or what it will be called. However, shares of the company rose 1.4% the morning after its big reveal.
Alibaba is set to release its fourth-quarter earnings on February 23. Analysts expect earnings of $2.38 per share and revenue of $35.93 billion. While earnings are down from $2.59 per share in the same quarter of last year, revenue is expected to increase 6% from $33.71 billion.
I doubt Alibaba will be the only player to join the race, so it will be interesting to see what other competitors will emerge in this race toward AI development – and what breakthroughs will be made.
While I am excited about what the future for AI holds, and firmly believe that it will be life-changing and provide great money-making opportunities for investors in the long term, the issue right now with these specific companies is that none boast very strong fundamentals and are unlikely to post big returns in the near term. Plus, if their AI products do not wow investors, the stocks could get shot. As we discussed, this was the case with Alphabet after its AI event failed to impress Wall Street.
It’s why in the current market environment, I am focusing on stocks that can generate real, hold-in-your-hand cash now. And it’s for this reason that on Thursday, February 16, I hosted a special event – the $50k Cash Comeback – to reveal the new income research project designed to pinpoint investment opportunities that could generate incredible amounts of income, over and over again.
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If you missed the event, click here to watch the replay now.
Editor, Market 360
P.S. Because I am so confident in this new discovery, I’m pledging anyone who follows this research will be able to generate twenty $2,500 payouts in the next year, based on my model portfolio. If you missed my $50k Cash Comeback event, it’s not too late to learn the ins and outs of my income secret and access my new trade recommendation. You can watch a replay of the full broadcast by clicking here.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Microsoft Corporation (MSFT), Alphabet Inc. (GOOG), and Alibaba Group Holding Limited (BABA)