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Google’s Gemini Headaches Spur $90 Billion Selloff

Feb 27, 2024 - forbes.com
Google's parent company, Alphabet, lost $90 billion in market value as controversy arose over its generative artificial intelligence product, Gemini AI. The AI service faced backlash for producing racially inaccurate images of historical figures and its chatbot's refusal to compare the negative impacts of Adolf Hitler and Elon Musk. This led to Alphabet admitting its early rollout of Gemini was flawed and temporarily taking its AI image service offline.

Alphabet's shares fell by 4.5%, marking its second-steepest daily loss in the past year. The controversy has raised concerns about Google's reliability as an AI source, which could potentially impact its dominance in the online search market. This comes as Alphabet's stock is down 1% year-to-date, lagging behind the S&P's 7% gain and the Nasdaq's 8% rally.

Key takeaways:

  • Google's parent company, Alphabet, lost about $90 billion in market value due to controversy over its generative artificial intelligence product.
  • Shares of Alphabet fell 4.5% to $138.75, marking its second-steepest daily loss of the last year, following issues with Google’s Gemini AI service.
  • Analysts suggest that if Google is seen as an unreliable source for AI, it could negatively impact the business and challenge its dominance in the online search market.
  • Alphabet's stock is down 1% year-to-date, trailing the S&P’s 7% gain and tech-heavy Nasdaq’s 8% rally, as well as the double-digit gains of rivals like Microsoft and Meta.
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