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GOOGL Takes on ChatGPT Buzz: How Are AMZN, BIDU & META Placed?

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Alphabet’s (GOOGL - Free Report) division Google has pepped up the battle for generative AI-backed chatbots. It is finally set to take on the moat of Microsoft (MSFT - Free Report) in this game with the launch of its much-awaited chatbot named Bard.

Google launched Bard as an experiment, and currently, it is available with limited access for selected users in the United States and the United Kingdom. Bard is characterized as a product that enables the collaboration of users with generative AI.

Notably, Bard marks Google’s cut-throat response to ChatGPT, a chatbot from the Microsoft-backed startup OpenAI, which has taken the world by storm.

Thanks to ChatGPT, the quest for generative AI and chatbots has reached a fever pitch.

According to a report from The Brainy Insights, the market for generative AI is expected to reach $188.62 billion by 2032 at a CAGR of 36.1% between 2022 and 2032.

Per a Grand View Research report, the market is likely to hit $109.4 billion by 2030 at a CAGR of 34.6% between 2022 and 2030.

A Precedence Research report indicates that the global chatbot market is expected to reach $4.9 billion by 2032 at a CAGR of 19.3% over a period of 2023 to 2032.

Given this upbeat scenario, not only Microsoft and Google but also other tech giants like Amazon (AMZN - Free Report) , Baidu (BIDU - Free Report) and Meta Platforms (META - Free Report) are making concerted efforts to capitalize on the abovementioned growth opportunities.

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ChatGPT Frenzy and MSFT’s Stance

ChatGPT has now become the hot thing in the tech sector as it has been captivating users by providing accurate and quick answers to complex questions.

ChatGPT has produced convincing results when tested by customers in their daily lives. Also, many companies are now willing to incorporate the chatbot into their operations, thanks to its prompt responses.

Moreover, the software has set a record by witnessing rapid growth in its user base. Reportedly, its monthly active user base reached the mark of 100 million in January, just two months after its launch. Further, Similarweb data shows that there were 13 million unique visitors in the same month who used ChatGPT per day on average.

These numbers testify to the fact that Microsoft — one of the major investors in OpenAI, having investments worth $10 billion — has created a huge opportunity for itself to cash in on. Per the terms, Microsoft will get 75% of OpenAI's income unless the latter earns back its initial investment from ChatGPT and other applications.

This apart, the Zacks Rank #3 (Hold) company recently integrated OpenAI’s next-generation large language model  called GPT-4 into its search engine Bing, and its browser Edge, in a bid to deliver a ChatGPT-like experience to users.

Is Bard a Challenge?

Amid the warnings regarding Bard’s accuracy, which also holds true for Microsoft’s new copilot Bing-Edge, the former holds the ability to pose threats to the latter.

Notably, Bard is based on Google’s Language Model for Dialogue Applications (LaMDA) and produces blocks of text instantly. The responses produced by Bard are termed as “drafts.”

More precisely, the chatbot responds to complicated or open-ended questions in the form of chats, and can handle follow-up questions in a conversational manner like ChatGPT. Further, it features three different versions of any given answer, which users can toggle.

Additionally, Google has trained Bard on millions of lines of encyclopedias, text books, online books and several articles. Further, Bard is connected to Google’s search results.

Hence, it can be concluded that Alphabet, which carries a Zacks Rank #3, has positioned itself well in the chatbot as well as generative AI race on the back of Bard.

How AMZN, BIDU & META Are Placed

Recently, Baidu also introduced its AI-powered chatbot called Ernie Bot, which marks the first Chinese contender of ChatGPT.

Notably, Ernie Bot is capable of solving mathematics queries, responds to questions regarding Chinese literature, and generates images and videos. Further, the chatbot has the ability to generate audio in different Chinese dialects. It is also fluent in Chinese idioms and holds expertise in business writing.

Currently, Baidu, which sports a Zacks Rank #1 (Strong Buy), is gearing up to launch a cloud service integrated with Ernie Bot and other related products next week. This is expected to aid various enterprises in building their own models and applications seamlessly by helping them to select appropriate cloud services.

Meanwhile, Amazon, which carries a Zacks Rank #3, has released its own language model that is claimed to be better than OpenAI’s GPT-3.5 in terms of performance in ScienceQA — a large set of multimodal science questions with annotated answers.

Notably, Amazon’s language model is based on a multimodal chain-of-thought (CoT) that uses visual features at different stages of finding out the answer. Apart from this, the company has joined forces with an AI startup, namely Hugging Face in order to develop an application to counter ChatGPT.

On the other hand, Meta Platforms, sporting a Zacks Rank #1, can’t be ignored in the race for chatbots and AI. The company recently launched its state-of-the-art foundational language model known as Large Language Model Meta AI (LLaMA). Notably, LLaMA is claimed to be a research tool holding more potential than OpenAI’s large language model.

Meta strives to aid developers in building AI-based chatbots on the back of LLaMA.

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

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