If you haven’t already realised, we’re in the midst of a pretty wacky market right now.
We’ve got stock prices soaring despite interest rates still rising.
Everyone is calling out a forthcoming recession despite record unemployment.
And in the background, steadily unfolding on its own, we’ve got tensions building between the world’s two biggest economies…
It’s pretty chaotic out there for even the most seasoned investor. After all, it’s times like these that we see some of the most bizarre developments.
Overnight in the US though, Google may have taken the cake for the best headline I’ve seen in a while:
‘Alphabet Stock Loses $100 Billion After New AI Chatbot Gives Wrong Answer in Ad’
This is the top news story that I woke up to this morning. A hilarious insight into just how volatile the stock market is right now.
Because if Google can lose 8% of their market value over a failed publicity stunt, then investors really are fickle right now. But it also goes to show just how seriously people are starting to take AI.
So, let’s dig a little deeper into why Google has been so heavily sold off for its AI blunder…
The new tech frontier
To be clear, AI or artificial intelligence isn’t exactly a new phenomenon.
You’ve probably seen or heard about it for years at this point. Every other new fancy tech breakthrough is usually attributed to AI.
More often than not, this is just marketing hyperbole. Using simple algorithms or computer scripts isn’t what AI’s about, but it is easy to sell it as such.
Take ChatGPT, for example. You may have heard about this chatbot recently as it’s made numerous headlines of its own.
Apparently, it has become a popular tool among students to use the software to write essays. It has even been reported to have passed law and business school exams, as well as Google’s own coding interview.
In other words, it’s a highly sophisticated chatbot.
Is it the kind of society-breaking AI that you always hear about though?
No.
Not yet, anyway.
ChatGPT is still, for the most part, just a simple tool for written responses.
The easiest way to think about it is as if it’s a calculator for words instead of numbers. You provide it with a problem, and it will provide a solution.
The key difference, of course, is that words have far more nuance than numbers. Which is why ChatGPT is still an imperfect tool at the moment.
Just like Google’s ‘AI’, it can offer up factually wrong information. That’s what makes Google’s US$100 billion mistake so ironic. Because the main reason it was punished so heavily is because investors are worried that their main competitor, Microsoft, is pulling ahead in this AI race.
For all I know, they might be, but considering that Microsoft has invested heavily in the company behind ChatGPT, I don’t think Google is out of this race just yet…
From chatbots to artificial generalised intelligence
See, at the end of the day, both Google and Microsoft are at the start of a long journey.
Don’t get me wrong, these chatbots they’re making are actually really promising. But they’re still light years away from the kind of artificial generalised intelligence that everyone is hoping they’ll become.
A true AI is one that should be able to think and reason like a human being. It won’t just regurgitate information that is already available, it should be able to think, learn, and express at a much deeper level.
That’s what makes AI so exciting and so scary to people.
Like I said though, we’re likely a long way off actually seeing this kind of tech just yet.
It will be a gradual process of development to get to that stage. On the way there will be plenty of successful milestones, like the one ChatGPT is experiencing right now.
And there will also be plenty of blunders, like the one Google is experiencing right now…
But for investors in general, AI is an extremely exciting piece of technology. It won’t deliver the kind of overnight transformation some people may try to sell you, but it’s likely to change our society dramatically over time.
Just like other disruptive technologies such as computers, smartphones, and the internet have done in the past; AI will change our world. That’s what investors are banking on, and that is why a simple chatbot mishap can cost a company US$100 billion.
Because at the end of the day, when the first AI-powered tools become mainstream, their true value will be worth a whole lot more. And I, for one, can’t wait to see how the likes of Google and Microsoft will make that possible.
Regards,
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Ryan Clarkson-Ledward,
Editor, Money Morning
