Google shares responded positively to news of Gemini, although the market is unclear about monetization and how it fairs against GPT 4 Turbo.
Google LLC (NASDAQ: GOOGL) shares jumped 5% yesterday when the tech giant announced a new artificial intelligence (AI) model it calls Gemini. Shares added $6.91 to close at $136.93. As of this writing, GOOGL has climbed slightly higher to $137.21. The company’s stock has also increased 55.20% year-to-date (YTD), and 47.51% over the last year, according to MarketWatch data.
Gemini Announcement Boosts Google Shares and Points to Positive AI Outlook for the Company
The rise in Google shares from announcing Gemini puts the company solidly back in the AI race as observers had begun to wonder if Google had any further plans for the technology. According to analysts from Bank of America (NYSE: BAC), Google’s Gemini could improve the company’s share trajectory next year. In a recent note, the analysts said:
“We think Google has strong AI capabilities, and data suggesting that Google has best in class, proprietary, AI capabilities can be positive for the shares in 1H’ 24.”
Wells Fargo’s trading desk seems to agree with Bank of America, stating that announcing Gemini “should be enough to quiet down the where is GOOG on AI’ chatter”. It also posed a question about how Google intends to monetize Gemini.
Gemini is Google’s AI model designed to rival OpenAI’s GPT-3.5. Google says Gemini outperforms GPT 3.5 and comes in multiple variations for specific tasks and uses. These variations are Gemini Nano, Gemini Pro, and Gemini Ultra. Although Google touted Gemini, its use cases, and its performance, the company has no details on whether or not it can outperform OpenAI’s new GPT-4 Turbo.
Google says Gemini Ultra performs abundantly well in Massive Multitask Language Understanding (MMLU) and can outperform human experts in several disciplines, including history, medicine, math, law, ethics, and physics. It is also capable of understanding nuances and handling complex subjects.
Using Gemini Pro, developers and enterprises enjoy scalability that can be applied to all kinds of businesses to increase productivity and help them scale. Lastly, Gemini Nano caters to Android mobile developers, helping them develop Android applications.
Market Reaction and OpenAI
According to JPMorgan analysts, the market “mostly yawned” at Google’s Gemini announcement. However, they are positive about the announcement and Google’s progress in AI. Nonetheless, the analysts suggest Google will face some problems caused by the lack of clarity with monetization.
“While it remains early, the Gemini launch represents significant innovation for Google as we enter year 2 of commercialized and widely distributed availability of Generative AI.”
OpenAI and Google are currently in an unofficial battle as the ChatGPT creator is trying to poach Google’s AI staff. OpenAI is allegedly offering compensation packages of up to $10 million to attract Google’s researchers. Reports suggest that OpenAI CEO Sam Altman has already made offers to AI researchers at Google.
Reportedly, most of the compensation would be in the form of stock. Reports also state that OpenAI might sell existing employees’ shares, valued between $80 billion and $90 billion, a move that might benefit researchers who join before the sale. In addition, OpenAI has published a vacancy for a research engineer position. Annual pay is between $245,000 and $450,000.