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Snap (SNAP) Introduces AI-Powered Chatbot for Subscriber Base

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Snap (SNAP - Free Report) launches My AI, a chatbot that has the latest version of OpenAI’s GPT. It is an experimental feature for Snapchat+ subscribers.

This feature will primarily be available to the paid customers only. Snapchat+ subscribers are currently paying $3.99 per month. The plan is to make the chatbot available to all 750 million monthly snapchat users.

My AI chatbot will be pinned in the conversations tab with friends and family. The chatbot is created more like a persona, just like any other friend on Snapchat. The aim is to make My AI as part of everyday life just like friends and family.

The primary difference between ChatGPT and Snapchat’s version is that the Snapchat version is more restrictive and adhering to the company’s safety and trust guidelines. My AI is trained by Snapchat’s employees to make it follow the company guidelines. This was done because ChatGPT got banned from various schools for helping students, whereas Snapchat’s My AI would politely decline to do the same task.

Some of the chatbot’s features are, it can recommend gift ideas for friends, write a haiku about cheese, suggest a recipe for dinner, plan a trekking trip for a long weekend and others.

The management has warned its customers not to share sensitive data with the chatbot because everything will be recorded.

Snap Inc. Price and Consensus

 

Snap Inc. Price and Consensus

Snap Inc. price-consensus-chart | Snap Inc. Quote

Snapchat Follows Other Tech Giants in AI Chatbot Race

Snap is the latest to join technology giants in the race for AI chatbots. Shares of Snapchat have lost 75.3% in the past year compared with the Zacks Consumer Discretionary sector’s decline of 19.8% in the same period.

There are some companies that have already adopted AI enabled chatbots like Microsoft’s (MSFT - Free Report) Bing and Alphabet’s (GOOGL - Free Report) Bard. Though Meta Platforms (META - Free Report) is in the development phase, its immense resources and huge customer base from Facebook, Instagram and WhatsApp can’t be ruled out from the race.

Microsoft launched Bing a few weeks back. Immediately after its launch, it came back with absurd behaviour issues and, therefore, a daily limit per user was enforced. This was recently increased from 50 to 100 per day. They have integrated Bing in their Skype and Microsoft Edge mobile applications for better customer experience.

Alphabet’s Bard was launched earlier this month, it combines knowledge from the Internet and large language models of Google to work smoothly. It is available only to its trusted testers and will be soon available for the public. Google, being a pioneer in search engine for years, expects the same dominance with their AI Bard.

Meta is lagging behind in the race. It recently created a team of top developers to build AI tools for the future. The management plans to integrate these AI tools in Messenger and WhatsApp for text and filters for Instagram.

The hype of AI chatbots was started by ChatGPT, which received huge demand and success all around the world. The big technology companies were quick to follow the trend. Though revenue streams are relatively unknown, they have already invested substantial amount of their time and money building AI chatbots.

The latest feature addition of My AI is expected to boost subscriber growth and drive the top-line for Snap as lack of revenue diversification is a major concern for the company.

Advertising is its only source of revenues, which is suffering from a continuous decline in price per ad impression. Moreover, decelerating growth in advertising revenues, following the backlash on redesign, remains an overhang for this Zacks Rank #4 (Sell) company.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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