Google Bard is spotted in a Google blog post with the Google logo on a mobile phone. February 6, 2023 in Brussels, Belgium.

Jonathan Raa | Nurphoto | Getty Images

Shares of Google’s parent company Alphabet fell more than 8% on Wednesday after the company held an event to promote its new artificial intelligence chatbot called Bard, a day after rival Microsoft held its own event to showcase new AI technology in its rival Bing search engine.

Google officially announced Bard Monday, confirming a previous report by CNBC, and the company said it will begin rolling out the technology in the coming weeks.

During an event broadcast live from Paris on Wednesday, Google executives discussed some of Bard’s possibilities. The presentation showed how Bard can be used to map the pros and cons of buying, say, an electric car or planning a trip to Northern California.

Bard is based on the company’s large language model LaMDA, or the language model for dialog applications. Google will open up the conversational technology to “trusted testers” before making it more widely available to the public, the company said in a blog post on Monday.

Alphabet shares fell during the event, suggesting investors were hoping for more in light of growing competition from Microsoft.

Google’s event happened just a day later Microsoft hosted its own AI event at its headquarters in Redmond, Washington. Microsoft’s event was dedicated to new AI-based updates to the Bing search engine and the Edge browser. Bing, which is behind Google in search, will now allow users to get more conversational answers to questions.

Microsoft’s product updates were built on the OpenAI technology that powers ChatGPT, which Microsoft has invested billions in.

ChatGPT is an artificial intelligence software that generates text based on complex written prompts. The web tool went viral after its debut in November, prompting analysts and Google employees to ask whether the company was falling behind in AI, an area that has been Google’s main focus for several years. In response to ChatGPT’s popularity, Google announced an internal “code red” to speed up development of Bard and other AI products, and the company’s co-founders Larry Page and Sergey Brin are reportedly back on board, years after stepping down from the daily work in the company.

While Microsoft’s recent investments in artificial intelligence are increasing the pressure on Google search, some analysts say it will take time for Microsoft to see significant gains.

“Search improvements will serve as a tailwind [advertising revenue long term]but it will take time to bring users back to Bing, and they will need a crowbar to lure advertisers away from Google,” Jefferies analyst Brent Thiel wrote on Tuesday. “We view these updates as the tip of the iceberg for MSFT. AI capabilities with the greatest potential in enterprise use cases.”

The UBS analyst said Microsoft has a “mountain to climb” if it hopes to overtake Google.

— CNBC’s Jennifer Elias contributed to this report.

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