Jim Cramer Offers Simple Explanation as to Why Google’s Core Business Could Soon Be in Shambles

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FEBRUARY 10, 2023

If he’s right, yikes!

Every once in a while investors become obsessed with a new tech fad that may or may not have a legitimate business use case.

OpenAI’s ChatGPT artificial intelligence text generator is that fad for the first quarter of 2023 and investors are taking sides as tech giants begin to battle over the next generation of AI.

Shares of Google parent company Alphabet dropped nearly 9% this week as investors seem underwhelmed with its own AI offering, Bard, while Microsoft  reaps the benefits of its investment in OpenAI.

“The most lucrative part of Alphabet’s business is search,” CNBC’s Jim Cramer said. “If you eliminate the ability to look at a lot of ads because you just spoke to your handheld instead of typing it in, then you have everybody who is second, third, fourth, fifth will pull their ads. They can’t solve that.”

Alphabet had its worst two days of trading this week since 2008.

“I question the Alphabet business model right now,” Cramer said.

What’s Driving the Sell Off

Alphabet seems to be on the defensive as Microsoft attempts to eat into its search engine dominance with ChatGPT.

Google’s answer to ChatGPT is Bard, but the program has had a rough go of it so far.

“Bard can be an outlet for creativity, and a launchpad for curiosity, helping you to explain new discoveries from NASA’s James Webb Space Telescope to a 9-year-old, or learn more about the best strikers in football right now, and then get drills to build your skills,” Sundar Pichai, Google’s CEO, said in a blog post.

But in an embarrassing early look at Bard results, an error appeared with the technology right out of the starting gate.

Asked the question, “What new discoveries from the James Webb Space Telescope can I tell my 9 year old about,” Bard gave a few answers, but one of them was incorrect.

“JWST took the very first pictures of a planet outside our solar system,” the AI technology wrote, according to The Verge.


Courtesy/Source: TheStreet