The strangest financial story yesterday was surely the fall in the Google share price after their new Bard AI tool gave the wrong answer to a question. This allegedly caused the share price to drop by 8% and damaged the whole technology sector with it apparently impacting the share prices of big technology trusts such as Polar Capital Technology and Scottish Mortgage.
Search engines are becoming a new battleground for Google and Microsoft with the latter owning ChatGPT. The addition of AI features is seen as a way to improve the answers that search engines produce and might undermine the dominance of Google if Microsoft can develop the technology and incorporate it into their products such as Bing.
To remind readers, Google became such a successful business after they were the first to produce a search engine that was based on keywords and which articles were most referenced by others. Microsoft have been playing catch-up ever since but still haven’t managed to undermine the dominance of Google.
ChatGPT can already be used to generate somewhat anodyne articles when prompted with a few questions and keywords so allegedly is being used by students to cheat in essay writing examinations. Both Bard and ChatGPT are using the information on the internet to construct “intelligent” answers to questions.
In the case of Bard it was asked the following question: “what new discoveries from the James Webb telescope can I tell my 9-year old about”? It answered “JWST took the very first pictures of a planet outside of our solar system”. This is not correct. This is surely simply a case of garbage in and garbage out. There was probably an internet article it relied upon. ChatGPT and Bard are interesting mainly because they attempt to interpret and understand natural language and phrase the answers using it. But that does not mean they are infallible because they rely on unverified information on the web. Also they may not be really intelligent but just rely on improved heuristic methods.
This is not as revolutionary as it is made out to be so the fact that they sometimes give the wrong answers is hardly surprising. Google’s dominant market position may not be undermined even if ChatGPT can help Microsoft and Bing to improve their technology. Google has become such an intrinsic part of the internet eco-system not just because of its great technology but also because of its business and marketing strategy.
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
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