AI race heats up: Alphabet soars 5.3% after Gemini launch

Alphabet shares ended 5.3% higher on Thursday as Wall Street cheered the launch of Gemini, saying the new artificial intelligence model could help narrow the gap in a race with Microsoft-backed OpenAI.

Long considered a leader in AI research, Alphabet lost the spotlight when OpenAI’s ChatGPT swept the tech landscape upon its launch in November last year and allowed Microsoft to aggressively roll out AI-powered software to businesses.

Now, Gemini looks poised to boost Alphabet’s AI heft again.

The Google parent said the much-awaited AI system was faster than OpenAI’s latest model and can process different forms of media such as video, audio and text. It comes in three versions, each designed to use a different amount of processing power.

“Google is beginning to address investor concerns around generative AI innovation and the high cost of running GenAI models through the combination of Gemini’s different model sizes,” J.P. Morgan analysts said. Reuters