The stock of Google’s parent company, Alphabet, surged 4% on Wednesday and another 5% on Thursday after the company made several artificial intelligence announcements at its I/O developer conference.
Alphabet’s market value increased by $131 billion over the two days, reigniting excitement for the company’s foray into AI. The stock is now trading at its highest level since August 2022.
Contrary to what occurred a few months ago when Alphabet introduced “Bard,” a competitor to ChatGPT, and saw its stock drop by 9% in a single day after one of Bard’s responses during a demo turned out to be inaccurate, this week the company received a positive response.
Alphabet CEO Sundar Pichai stated at the conference that “Generative AI is the next step for us. We are reimagining all of our core products, including search, with a bold and responsible approach.”
The company announced “AI Snapshot,” which incorporates generative AI results directly into Google’s search results. Microsoft’s Bing Search has followed a similar approach, displaying both an AI section and traditional search results on the same page for search query results.
In addition, Alphabet announced a new large language model, called PaLM 2, which is powering 25 new products and features that the company is launching. The new model can write code and currently supports over 100 languages.
Alphabet also announced a number of other products, including an image search feature to identify AI-generated images, AI-related updates to Google Maps, a foldable Pixel phone, and a new smartwatch operating system.
Wall Street had a positive reaction to Alphabet’s conference, with Bank of America stating in a Thursday note: “Overall, Google’s presentation was a significant improvement over the disappointing press event in February, with a strong framework for AI chatbot integration into search.”
BofA said that Google’s I/O presentation addressed three key concerns about AI-related search: product, cost, and monetization.