Googles parent company Alphabet saw its market value plummet by around $90 billion on Monday amidst growing controversy surrounding its new AI chatbot, Gemini. Alphabet shares sank 4.5% to $138.75 - the lowest price since January and its second steepest daily drop this past year. The selloff wiped more than $50 billion off Alphabets market capitalization, making it the worst performer in the S&P 500 index even as broader markets remained flat.The plunge follows backlash over perceived racist responses from Gemini, Alphabets latest foray into generative AI. The chatbot drew criticism for generating inaccurate depictions of historical figures.Further fueling the fire, when asked whether Elon Musk tweeting memes or Hitler killing millions was more harmful for society, Gemini refused to make a definitive judgement, saying there is no right or wrong answer.Analysts say the PR missteps highlight Googles struggles to keep pace in the rapidly evolving AI space.This is a meaningful blunder in the PR battle surrounding [generative AI] and further suggests that Google is trailing and mis-executing in a fast-moving and high-stakes space, said analyst Rob Sanderson.Other experts warn that doubts over the chatbots reliability may damage Googles brand as a trusted source of information.The issue for the stock is not the debate itself, it is the perception of truth behind the brand,” said analysts Ben Reitzes and Nick Monroe. With competitors rapidly advancing their AI capabilities, the episode underscores the precarious tightrope Google must walk to remain a leader in AI innovation while also building trust and mitigating risks from this transformative technology.
