Shares of alphabet (GOOG 5.34%) (GOOGL 5.32%) rose after the tech giant received widespread applause for the release of Gemini, its latest and most powerful artificial intelligence (AI) model. The market reaction was a notable contrast to its first AI chatbot, Bard, which the company released in February and was initially poorly received.
Alphabet shares rose 5.5% on the news as of 3:02 p.m. ET.
Alphabet is strengthening its AI position
There is a lot at stake with AI. Most tech CEOs believe that generative AI will be the next transformative technology and the spoils will go to the industry winner(s).
Until now, OpenAI, together with its partner, was considered a leader in the field of AI Microsoft, but Alphabet has taken a significant step to challenge that assumption with the release of Gemini. According to Alphabet, Gemini Ultra outperforms GPT-4 on tasks such as general knowledge, reasoning, math and programming.
The Google parent company also said that Gemini is the first model to outperform human experts in Massive Multitask Language Understanding (MMLU), a popular method for testing the capabilities of AI models. Gemini 1.0 is now rolling out across a range of products and platforms. The company expects it to be available in additional products, such as Search and Chrome, in the coming months.
Are twins a game-changer?
It’s too early to say whether Gemini will play a crucial role for Alphabet. AI technology is still evolving rapidly and OpenAI or another AI company could soon come out with something better.
However, it is clearly reassuring for investors that Alphabet is not standing still in the AI competition and will likely continue to lead. We’ll have to wait and see how Gemini’s adoption progresses, but it’s a mistake to think that Alphabet will be easily disrupted by new AI technologies or challengers like OpenAI.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.