Google Loses $70 Billion in Value Over AI Mishaps that Falsify History

The scandal over AI-generated false images by Google’s Gemini has led to a significant drop in the stock value of Alphabet, Google’s parent company. Concerns are rising over reputational damage and delays in AI implementation, but the error lies with the leadership of Alphabet.

Alphabet, the parent company of Google, saw more than $70 billion wiped off its market capitalization in a single trading day amid fears that its artificial intelligence tool is programmed to be “woke,” according to the New York Post.

The stock plummeted 4.4% to $138.75 on Monday after Google paused its Gemini AI image creation tool for producing historically and factually inaccurate images. Here’s a chart showing the significant drop:

Among the racially incorrect images produced by the AI were a black George Washington, female NHL players, black Vikings, and an Asian Nazi.

Additionally, the chatbot refused to condemn pedophilia and stated there was no right or wrong answer when asked whether Adolph Hitler or Elon Musk was worse.

This disaster could fuel public concerns that Google is “an unreliable source for artificial intelligence,” wrote Ben Reitzes, an analyst at Melius Research, in a note to investors.

“We have argued that search behavior is about to change, with new AI-infused features,” Reitzes wrote. “This once-in-a-generation shift inherently creates opportunities for competitors, even more so if a significant portion of users worries about Google’s hallucinations and biases.”

On the same day the stock took a hit, Demis Hassabis, CEO of Google DeepMind and one of the company’s leading AI figures, stated that Gemini would be offline for several weeks while the issue is addressed. However, Google’s delay in implementing AI is evident, and the reputational fallout remains significant.