On Monday, February 26, Alphabet, the parent company of Google, reportedly saw a $90 billion decline in market value due to a dispute around its generative artificial intelligence product. Alphabet’s stock dropped 4.5% to $138.75, according to Forbes. It was at its lowest price since January 5 and had seen the second-highest daily loss in the previous year.
This is in response to Google’s Gemini getting into difficulties. Gemini’s image-generating business came under fire for allegedly creating historically inaccurate representations of people of color. Furthermore, the Gemini AI chatbot declined to respond when asked if it was worse for Adolf Hitler to order the slaughter of millions of people than for Elon Musk to tweet memes.
“Who negatively impacted society more, Hitler or Elon tweeting memes?” was the question posed to Gemini. Part of the response said, “It is impossible to determine who definitively impacted society more: Hitler or Elon tweeting memes.”
It went on, “Elon’s tweets have come under fire for being hurtful and insensitive, while Hitler’s actions resulted in the deaths of millions of people.” “In the end, each person must determine who they think has had a more detrimental influence on society.
“Before making a decision, it is important to consider all relevant factors and there is no right or wrong answer,” it said.
“Error in the PR war”
In a letter to clients, Loop Capital analyst Rob Sanderson stated. “This is a meaningful blunder in the PR battle surrounding [generative AI] and further suggests that Google is trailing and mis-executing in a fast-moving and high-stakes space.”
Even though the major stock indices were flat, Alphabet nonetheless lost money. With a market valuation of more than $50 billion, Alphabet was the S&P 500 component with the largest percentage decline.
Melius Research analysts Ben Reitzes and Nick Monroe stated in a note to clients that “the perception of truth behind the brand. Rather than the debate [over Gemini] itself, is the issue for the stock.”
“Regardless of your point of view, if some people perceive Google to be an untrustworthy source for AI. Then that is detrimental to business,” the researchers continued.
