Key Findings Google has announced that AI generative helpers will be coming to its Workspace suite of apps – although no release date was in sight. Alphabet’s stock prices rose 3.14% in trading after the announcement. The stock price rise follows news Bing hasn’t eaten from Microsoft into Google’s search engine dominance
The AI wars have taken a different turn as Google takes another step forward. Big Tech’s steadfast and historic AI pioneer has announced that it will be launching a generative AI tool for its suite of Workspace apps including Google Docs, Sheets and Meet.
While the statement didn’t mention a launch date for the AI product, Wall Street nonetheless reacted positively, with Google’s share price rising by the end of Tuesday.
The move comes as Microsoft remains aggressive in its approach to AI and its partnership with OpenAI has seen fruitful stock market gains since the beginning of the year. Let’s get down to the details.
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Google’s latest game for investors
The search engine giant announced yesterday that it will be introducing generative AI capabilities to its workspace suite, which includes Google Docs, Slides and Sheets, among a host of other applications.
The announcement is packed with promises to make users’ lives easier and more streamlined, and get work done faster. A demo video accompanying the announcement shows AI as a collaborative partner, merging email chains, authoring user responses, creating presentations, and taking notes in meetings.
The press release emphasized that human scrutiny would be a top priority for the release, as users can reject AI suggestions and change them before the changes are confirmed.
When will the new features be released?
Here’s the kicker: Google is purposely vague about when its generative AI capabilities would launch. “We will continue to make these new Generative AI experiences available to trusted testers throughout the year,” was the official line in the press release – so we may still be years away from bringing this technology to the public.
Google clearly wanted to forestall any criticism of its schedule. “Getting this right — and at scale — is something we take very seriously,” it noted, citing careful testing required for protection and privacy.
The problem is that other companies are already well ahead of the curve. After a successful alpha launch, the all-in-one productivity tool Notion recently rolled out its generative AI feature to all users.
There’s also been a lot of hype surrounding Microsoft’s $10 billion investment in OpenAI since it unveiled its ChatGPT chatbot to the public last November. Microsoft has already integrated the technology into its Bing search engine, and OpenAI yesterday announced its new GPT-4 model, which boosted Microsoft’s share price by 2.71%.
How Google stock has performed
Despite Google’s relative snail’s pace, investors reacted positively to the news, with Alphabet’s stock prices touching $93.97 by the end of Tuesday’s trading hours — a one-day gain of 3.14%. This builds on Monday’s small rally after some upbeat market share news broke.
A new analysis found Microsoft’s big bet on OpenAI was more bark than bite. Since the launch of ChatGPT in November 2022, which has generated over 100 million users faster than any product in history, Google’s search share has remained stable – and even increased slightly. Share prices were up 2.1% on analysis.
While Google can’t rest on its laurels, Wall Street is likely counting on the company’s market share to see it through the AI wars. With well over 90% of the search market cornered, the launch of Google’s AI products in such a captive market will have a significant impact on who comes out on top.
Of course, anything can happen in the months leading up to the release of AI features as other big players try to grab a slice of Google’s market share. While investors might be pleased with this latest announcement, Google had better get a release date in its cards — and fast — to keep them on its side.
A welcome shift in sentiment on Wall Street for Google
This is all welcome news for Google, which has had a rocky start in the AI wars. Google, which has been pioneering AI technology for years, reportedly issued an internal “Code Red” after the release of ChatGPT.
Last month, Microsoft held a swanky press conference at its Seattle headquarters to launch Microsoft Bing’s ChatGPT integration. Overall, the stock is up 10.3% since announcing its partnership with OpenAI.
In comparison, the launch of Google’s Bard feature was a disaster. The introductory video contained an inaccurate answer, which was a costly mistake: over $100 billion was deducted from Google’s stock value thanks to the mistake.
What Else Could Affect Google’s Stock Price?
The conglomerate is expected to release its Q1 results at the end of April. Early estimates show positive earnings for Google, with Zacks forecasting full-year revenue of $246.7 billion — a 5.48% increase if that proves true.
Google may be projecting sunny skies, but some clouds may appear on the horizon. The Supreme Court is set to release its Gonzalez v. Google ruling, which could result in Section 230, a decades-old legal protection for third-party liability, being removed for all big tech.
If the verdict doesn’t go in Google’s favour, it could spend billions on a tangle of class action lawsuits by plaintiffs — and its stock price would undoubtedly suffer.
Rumors are also swirling around CEO Sundar Pichai and how long his tenure will last after Microsoft makes the leap into the AI wars. Founders Larry Page and Sergey Brin are reportedly taking a more active role at the company since Microsoft pushed ahead with the adoption of Bing AI.
Pichai was criticized for being too slow off the line with the AI and not being urgent with his response since. Some employees and shareholders are now suggesting that it is time for him to leave.
This could affect Google’s stock price — any new CEO rate is risky — but it depends on who it is. Should Page and Brin decide to return to the helm, they would likely be welcomed with open arms and Alphabet’s stock prices could be unaffected.
The final result
Google might be a bit behind when it comes to customer-centric AI, but the war is far from over. And that’s the challenge of investing in technology companies. They can offer huge wins, but it’s hard to know who will come out on top.
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