Possibly in response to investors’ concerns about Google lagging in the ChatGPT competition, Google has started testing its own conversational AI product. Called Bard, the product is now undergoing testing by a select group of users. In the coming weeks, that group will be expanded, and the new AI chat service will be available first to Alphabet employees, and then to the general public.
Yesterday, Alphabet (GOOGL) CEO Sundar Pichai wrote a blog post, introducing the concept of Bard. Much like ChatGPT, Bard provides responses to user questions, based on information it gleans from the internet. Pichai indicated that Google has been slower to roll out this product due to management’s cautiousness, as Google is determined to eliminate errors and bias from Bard before it meets the public.
Google’s Conversational AI Service
Google’s Bard is powered by LaMDA, its Language Model for Application Services. Google has been using LaMDA for the past two years, and new innovations allow it to draw current information from the web to create “fresh, high-quality responses,” according to Pichai. While ChatGPT is limited to sources that were published before 2022, Bard constantly scours the web for the most recent information.
In his blog post, Google’s CEO gave an example of a question: “What new discoveries from the James Webb space telescope can I tell my 9 year old about?” The response from Bard started with, “Your 9-year old might like these discoveries from the James Webb Space Telescope,” then gave three relevant, bulleted answers. The program summed up its answer with the comment, “These discoveries can spark a child’s imagination about the infinite wonders of the universe.”
Analysts Gaga Over Google
Given Google’s successful track record with AI-influenced responses to searches, its new chat AI product seems highly promising.
Even before yesterday’s announcement, Alphabet held Strong Buy ratings from all 30 analysts who cover the stock. Yesterday, two analysts reiterated their Buys: Bernstein analyst Mark Shmulik, and UBS analyst Lloyd Walmsley.
Altogether, the analyst consensus on GOOGL stock is a Strong Buy. The consensus forecast of $129.40 implies an upside of 25.8%.
Although Alphabet’s stock is down year-over-year, it’s already risen by 15.5% since the beginning of 2023. Given the intense investor interest in AI-driven conversation, GOOGL stock could see a frenzy of increased activity as Bard appears on the scene.