Recently, Google has experienced positive and negative impacts on its stock price due to developments related to its artificial intelligence (AI) initiatives. While Google and other companies like Microsoft have praised their AI product, Google has had fits and starts. For example, Google had to pause its Gemini image maker because its accuracy was worse than expected. The stock price has whipsawed, and as of March 2024 (see chart), the share price was unchanged in 2024 compared to the S&P 500 index, which was up about 8%. As investors continue to focus on artificial intelligence, Google's share price will likely rise and fall, and the different issues with Gemini will be ironed out.

What is Gemini AI?

Gemini is Google's latest large language model (LLM), designed to understand and interact with multiple data types, including text, images, audio, and video. Gemini can complete complex tasks in math, physics, and other areas as a multimodal model. It can also understand and generate high-quality code in various programming languages12. Google has integrated Gemini into multiple products and services.

Google Bard was an early experiment with generative AI. It allowed users to collaborate directly with a large language model (LLM) by providing text prompts. Bard was an interface enabling tasks like writing, coding, creativity, and curiosity. People used it for various projects, such as creating resumes, planning trips, etc. While Bard was a standalone experiment, its successor, Google Gemini, has expanded capabilities and is now Google's latest LLM. Gemini can understand text, images, videos, and audio and even generate high-quality code in various programming languages.

What are Large Language Models?

Large language models are advanced artificial intelligence models designed to process and understand human language at a sophisticated level. These models leverage deep learning techniques, particularly transformer-based architectures, to analyze and generate text data with high accuracy and fluency.

Large language models are trained on vast amounts of textual data, such as books, articles, websites, and other sources, to learn the intricacies of human language patterns, syntax, and semantics. The models can generate coherent and contextually relevant responses to queries, prompts, or tasks by processing this extensive corpus of text.

These models exhibit impressive capabilities in various natural language processing tasks, including text generation, sentiment analysis, language translation, question answering, and more. They perform effectively in multiple contexts, such as chatbots, virtual assistants, content creation, and data analysis, providing valuable insights and enabling automation in numerous industries and applications.

How is Artificial Intelligence Used?

Artificial intelligence (AI) is used in various applications and industries to perform tasks that typically require human intelligence, such as problem-solving, decision-making, language understanding, and perception. Here are some common ways AI is used:

AI algorithms are used in machine learning to analyze data, identify patterns, and make predictions. Machine learning models are trained on large datasets to learn from experience and improve their performance over time.

Natural Language Processing techniques are used to process and understand human language. AI-powered chatbots, virtual assistants, and language translation tools rely on NLP to interact with users and provide accurate responses.

AI is used in computer vision applications to analyze and interpret visual information from images or videos. This technology is used in facial recognition systems, autonomous vehicles, medical imaging, and quality control in manufacturing.

AI-powered recommendation systems are used in e-commerce platforms, streaming services, and social media to personalize content and suggest products or services based on user preferences and behavior. AI is used in autonomous systems such as self-driving cars, drones, and robots to make decisions and navigate environments without human intervention.

AI is used in healthcare for medical imaging analysis, drug discovery, personalized medicine, and predictive analytics to improve patient outcomes and streamline healthcare operations. AI is used in the finance industry for fraud detection, algorithmic trading, risk assessment, customer service chatbots, and personalized financial advice.

AI is used in marketing and advertising for predictive analytics, targeted advertising, content optimization, and customer segmentation to enhance marketing campaigns and improve ROI. AI is used for character behavior and decision-making, procedural content generation, and player experience optimization. AI is used in cybersecurity for threat detection, anomaly detection, and malware analysis to identify and mitigate security risks in real-time.

What is an AI Chatbot?

An AI chatbot, or simply a chatbot, is a computer program or artificial intelligence designed to simulate a conversation with human users through text or speech interfaces. These virtual assistants use natural language processing technology to understand and respond to user queries conversationally.

AI chatbots can be found in various applications and industries, including customer service, e-commerce, healthcare, banking, and more. They are used to provide information, answer questions, assist with transactions, offer support, and engage with users in a personalized and responsive way.

Rule-based chatbots: follow pre-defined rules and scripts to generate responses based on keywords or patterns in user input. While rule-based chatbots can be effective for simple and structured interactions, they may be unable to handle complex queries or understand natural language nuances.

AI-Powered chatbots: These chatbots leverage artificial intelligence, machine learning, and natural language processing to understand user intent, learn from interactions, and provide contextually relevant responses. AI-powered chatbots can adapt to new scenarios, improve over time, and offer more personalized and human-like conversational experiences.

AI chatbots are designed to enhance customer service, streamline interactions, and provide 24/7 support to users. They can be deployed on websites, messaging platforms, mobile apps, and voice-enabled devices to engage with customers, assist with inquiries, drive sales, and improve user satisfaction.

Why is AI attractive to investors?

AI is attractive to investors for several reasons, including its potential to transform industries, drive innovation, and create new opportunities for growth and profitability. 

AI is considered a disruptive technology that has the potential to revolutionize business processes, products, and services across various industries. Investors are attracted to AI's ability to drive digital transformation, increase efficiency, and create competitive advantages for companies.

AI technologies can scale rapidly and handle complex tasks and large datasets with high accuracy and speed. This scalability enables businesses to automate processes, increase productivity, and unlock new revenue streams, making AI investments appealing to investors looking for growth opportunities.

AI solutions offer innovative capabilities, such as predictive analytics, personalized recommendations, and natural language processing, that can differentiate companies and provide them with a competitive edge. Investors see AI as a driver of innovation that can help companies stay ahead of the curve.

AI technologies can help businesses streamline operations, optimize resources, and reduce costs through automation and efficiency improvements. Investors are attracted to AI solutions that offer cost-saving opportunities and the potential for higher returns on investment.

AI enables businesses to collect, analyze, and derive actionable insights from large volumes of data, leading to better decision-making and strategic planning. Investors recognize the value of data-driven AI solutions in delivering insights that drive business growth and profitability.

The AI market is rapidly growing, and there is increasing demand for AI technologies across healthcare, finance, retail, and more. Investors see AI as a high-growth sector with significant market potential and opportunities for returns on investment.

Investors are attracted to companies leveraging AI through strategic partnerships, collaborations, and acquisitions to enhance their offerings and expand their market presence. AI investments can lead to valuable synergies and value creation for investors.

AI's potential to drive innovation, efficiency, cost savings, and competitive advantage makes it an attractive investment opportunity for investors seeking exposure to cutting-edge technologies and high-growth markets. The transformative impact of AI on industries and businesses further solidifies its appeal as a strategic and profitable investment option.

Who are Google's Chatbot Competitors?

Microsoft Copilot is an AI-powered assistant developed by Microsoft. It was launched on February 7, 2023. Copilot is based on a large language model and can perform various tasks. It can cite sources, create poems, write songs, and more. Copilot serves as a conversational chat interface. 

You can generate text, such as emails and summaries. You can create images based on the text prompts you provide. You can even ask Copilot to write code in popular programming languages like JavaScript, C, and Python2.

What Has Google Announced That Has Been Positive

Google announced Gemini for workspace and rebranded from Duet AI; this service offers productivity-related features for businesses. A subscription-based offering using a more powerful LLM called Gemini Ultra. Google One AI Premium subscribers receive additional benefits from this model.

What Has Occurred to Google AI That Has Been Negative

The Gemini chatbot debacle generated a significant one-day loss. Google's parent company, Alphabet, suffered a $70 billion loss in market value in a single trading as the chatbot's image mishap. The chatbot, part of the Gemini AI tool, produced factually and historically inaccurate images, including Black Vikings, female NHL players, and diverse versions of America's Founding Fathers. This incident raised concerns among investors about Google's reliability as an AI source. The bizarre behavior of the Gemini chatbot fueled worries that Google's AI might be biased or unreliable. 

The Bottom Line

AI can potentially be a disruptive technology that drives productivity and efficiency. The first machination allows consumers to determine how to use AI and the most convenient products. During these early stages, Alphabet, Google's parent company, has experienced whipsaw price action due to the pros and cons of Gemini AI and the news that changes investor sentiment.