Alphabet records 5.3% surge in its shares

Alphabet experienced a 5.3% surge in its shares on Thursday as it unveiled Google’s Gemini AI, marking a significant move in the tech giant’s bid to regain dominance in the artificial intelligence (AI) sector, according to Reuters. Analysts suggest that Gemini is poised to close the gap with Microsoft-backed OpenAI, highlighting Alphabet’s renewed focus on AI innovation. Last year, Alphabet temporarily lost ground to OpenAI’s ChatGPT, enabling Microsoft to take the lead in deploying AI-powered software to businesses.

Gemini has drawn attention for its potential to outpace OpenAI’s latest offering, emphasizing its speed and capability to process various media formats, including video, audio, and text. J.P. Morgan analysts noted that the launch of Gemini addresses investor concerns about the high costs associated with running generative AI models, signaling Google’s commitment to AI innovation. Alphabet’s market value surged by over $80 billion, reflecting a positive market response to Gemini’s capabilities.

The release of Gemini aims to alleviate concerns raised by OpenAI users dissatisfied with recent updates affecting the quality of GPT model output. Analysts see potential for Gemini to surpass the capabilities of GPT-4, providing Google with a competitive edge and attracting users and developers. Gemini’s technology has been integrated into Alphabet’s Bard chatbot, with plans to unveil the most advanced Gemini version through Bard early next year.

A six-minute video showcased Gemini’s capabilities, highlighting its proficiency in recognizing magic tricks and assisting users in creating art. The demonstration showcased Gemini’s versatility in handling diverse tasks, from entertainment to creative work.

Despite Alphabet’s leadership in AI research, Microsoft has maintained a lead in the race for AI-driven cloud revenue. Google Cloud’s growth slowed in the September quarter, prompting Alphabet to refocus its efforts on reclaiming market share. While some critics may label Google as late to the AI party, Ken Mahoney, CEO of Mahoney Asset Management, emphasized Google’s commitment to getting it right and seizing its opportunity in the AI space, positioning Gemini as a crucial driver for the company’s growth.