Google Stock Jumps As It Puts Artificial Intelligence Into Google Docs

Google has announced generative AI helpers will be coming to its Workspace suite of apps – though no release date was forthcoming
Google Stock Jumps As It Puts Artificial Intelligence Into Google Docs

?Key takeaways

  • Google has announced generative AI helpers will be coming to its Workspace suite of apps – though no release date was forthcoming
  • Alphabet stock prices jumped up 3.14% in trading after the announcement
  • The stock price increase follows news that Microsoft’s Bing hasn’t eaten into Google’s search engine dominance

The AI wars have taken another turn as Google takes another step forward. The Big Tech stalwart and historic AI pioneer has announced it will introduce a generative AI tool for its Workspace suite of apps including Google Docs, Sheets and Meet.

While the statement failed to mention any launch date of the AI product, Wall Street still responded positively, with an uptick in Google’s stock price by the end of Tuesday.

The move comes as Microsoft remains aggressive in its approach to AI, with its partnership with OpenAI producing fruitful stock market gains since the start of the year. Let’s get into the details.

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Google’s latest play for investors

The search engine giant announced yesterday that it would introduce generative AI features to its Workspace suite, which encompasses Google Docs, Slides and Sheets among a host of other applications.

The announcement is full of promises to make users’ lives easier, more streamlined and get work done faster. A demo video for the announcement shows AI as a collaborative partner by summarizing email chains, drafting user responses, building presentations and taking notes in meetings.

The press release stressed human control would be a top priority for the release, with users able to reject and amend AI suggestions before the changes are confirmed.

When do the new features launch?

Here’s the kicker: Google is deliberately vague on when the generative AI capabilities would launch. “We will be bringing these new generative-AI experiences to trusted testers on a rolling basis throughout the year,” was the official line in the press release – so we’re still potentially years away from seeing this tech released to the public.

Google clearly wanted to pre-empt any criticism around its timeline. “Getting this right — and at scale — is something we take very seriously,” it noted, citing careful testing needed for safeguarding and data privacy.

The problem is that other companies are already way ahead of the curve. After a successful alpha launch, the all-in-one productivity tool Notion recently launched its generative AI feature to all users.

There’s also been a lot of hype around Microsoft’s $10bn investment into OpenAI since it launched its ChatGPT chatbot to the public in November last year. Microsoft has already integrated the technology into its search engine Bing, plus OpenAI announced its new GPT-4 model yesterday, which saw Microsoft’s share price climb 2.71%.

How Google’s stock has fared

Despite the relative snail’s pace from Google, investors have responded positively to the news, with Alphabet stock prices hitting $93.97 by the end of Tuesday trading hours – a 3.14% gain in one day. This builds on Monday’s small rally after some positive market share news emerged.

A new analysis revealed that Microsoft’s big bet on OpenAI has been more bark than bite. Since the launch of ChatGPT in November 2022, which has generated over 100m users faster than any product in history, Google’s search share has remained stable – and has even made slight gains. Stock prices were up 2.1% at the analysis.

While Google can’t rest on its laurels, Wall Street is likely counting on the company’s market share to see it through the AI wars. With well over 90% of the search engine market cornered, the uptake of Google’s AI products to such a captive market will significantly impact who comes out on top.

Of course, with other major players looking to take a bite out of Google’s market share, anything could happen in the months leading up to its eventual AI features release. While investors might be happy with this latest announcement, Google had better get a release date on the cards – and fast – to keep them on its side.

A welcome shift in Wall Street sentiment for Google

This will all be welcome news to Google, which has had a rocky start to the AI wars. Google, which has pioneered AI technology for years, allegedly issued an internal ‘code red’ after ChatGPT’s release.

Last month Microsoft held a slick press conference at its Seattle headquarters to launch Microsoft Bing’s ChatGPT integration. Overall, the stock is up 10.3% since its partnership with OpenAI was announced.

In comparison, Google’s launch of its Bard feature was a disaster. Its launch video had an inaccurate answer included, which was a costly mistake: over $100bn was wiped off of Google’s stock value thanks to the error.

What else could affect Google’s stock price?

The conglomerate is set to release its Q1 earnings at the end of April. Early estimates show positive gains for Google, with Zacks pegging a full-year revenue prediction of $246.7bn – a 5.48% increase, should it play out.

Google might be planning for sunny skies, but some clouds may be on the horizon. The Supreme Court will release its judgment on Gonzalez v. Google, which could see Section 230, a decades-old legal protection for third-party liability, removed for all of Big Tech.

Should the ruling not be in Google’s favor, it could spend billions on a tangle of class-action lawsuits from claimants seeking damages – and the stock price would undoubtedly take a hit.

Rumors are also beginning to swirl around CEO Sundar Pichai and how long his tenure will last after Microsoft got the jump in the AI wars. Founders Larry Page and Sergey Brin are reportedly taking more active roles in the company since Microsoft forged ahead with its Bing AI launch.

Pichai has faced criticism for being too slow off the line with AI and not urgent with his response since. Some employees and shareholders now suggest it’s time for him to go.

This could affect Google’s stock price – any new installment of a CEO is risky – but it depends on who it is. If Page and Brin decided to return to the helm, they’d likely be welcomed with open arms and Alphabet stock prices could remain unaffected.

The bottom line

Google may be a bit behind the eight ball when it comes to consumer facing AI, but the war is far from done yet. And this is the challenge with investing in technology companies. They can offer huge gains, but it’s hard to know who’s going to come out on top.

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