In a major setback for Alphabet, Google’s parent company, the controversy surrounding its generative artificial intelligence product, Gemini, has resulted in a staggering market value loss of approximately $90 billion on February 26. The controversy erupted when Gemini’s image-generating service faced accusations of producing racially inaccurate depictions of historical figures.
Shares of Alphabet witnessed a sharp decline of 4.5%, reaching $138.75, marking its lowest price since January 5. This incident also led to Alphabet’s second-steepest daily loss in the past year.
The crisis unfolded as Google’s generative AI chatbot, Gemini, refused to respond to a controversial question comparing Elon Musk’s tweets to Adolf Hitler’s actions. Gemini’s response, stating the difficulty of determining the societal impact of the two, drew criticism and fueled the ongoing debate over ethical considerations in AI.
While the controversy initially centers around Gemini, analysts argue that the broader concern lies in the potential damage to Google’s brand perception. The incident highlights the challenges and risks associated with AI in the public eye, emphasizing the need for responsible and sensitive handling of such technologies.
If a portion of the population perceives Google as an unreliable source for AI, it could have far-reaching negative implications for the business. Despite the overall stock market maintaining stability, Alphabet faced significant losses, emerging as the largest percentage faller among S&P 500 constituents.
