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Google Bard flubs answer in ad. That mistake cost Google billions

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Alphabet Inc lost $100 billion in market value on Wednesday after its new chatbot shared inaccurate information in a promotional video and a company event failed to dazzle, feeding worries that the Google parent is losing ground to rival Microsoft Corp. Also Read – Google’s VP of labs, Salesforce’s former co-CEO to form AI company

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Alphabet shares slid as much as 9 percent during regular trading with volumes nearly three times the 50-day moving average. They pared losses after hours and were roughly flat. The stock had lost 40 percent of its value last year but rallied 15 percent since the beginning of this year, excluding Wednesday’s losses. Also Read – Microsoft Bing gets an even powerful language model than ChatGPT, Edge browser gets AI features

Reuters was first to point out an error in Google’s advertisement for chatbot Bard, which debuted on Monday, about which satellite first took pictures of a planet outside the Earth’s solar system. Also Read – Microsoft surprise event today: Is ChatGPT powered Bing search finally releasing?

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Google has been on its heels after OpenAI, a startup Microsoft is backing with around $10 billion, introduced software in November that has wowed consumers and become a fixation in Silicon Valley circles for its surprisingly accurate and well-written answers to simple prompts.

Google’s live-streamed presentation on Wednesday morning did not include details about how and when it would integrate Bard into its core search function. A day earlier, Microsoft held an event touting that it had already released to the public a version of its Bing search with ChatGPT functions integrated.

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Bard’s error was discovered just before the presentation by Google, based in Mountain View, California.

“While Google has been a leader in AI innovation over the last several years, they seemed to have fallen asleep on implementing this technology into their search product,” said Gil Luria, senior software analyst at D.A. Davidson. “Google has been scrambling over the last few weeks to catch up on Search and that caused the announcement yesterday (Tuesday) to be rushed and the embarrassing mess up of posting a wrong answer during their demo.”

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Microsoft shares rose around 3 percent on Wednesday and were flat in post-market trading.

Alphabet posted a short GIF video of Bard in action via Twitter, promising it would help simplify complex topics, but it instead delivered an inaccurate answer.

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In the advertisement, Bard is given the prompt: “What new discoveries from the James Webb Space Telescope (JWST) can I tell my 9-year-old about?” Bard responds with a number of answers, including one suggesting the JWST was used to take the very first pictures of a planet outside the Earth’s solar system, or exoplanets. The first pictures of exoplanets were, however, taken by the European Southern Observatory’s Very Large Telescope (VLT) in 2004, as confirmed by NASA.

“This highlights the importance of a rigorous testing process, something that we’re kicking off this week with our Trusted Tester program,” a Google spokesperson said. “We’ll combine external feedback with our own internal testing to make sure Bard’s responses meet a high bar for quality, safety and groundedness in real-world information.”

Formidable competitor

Alphabet is coming off a disappointing fourth quarter as advertisers cut spending.

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The search and advertising giant is moving quickly to keep pace with OpenAI and rivals, reportedly bringing in founders Sergey Brin and Larry Page to accelerate its efforts.

“People are starting to question is Microsoft going to be a formidable competitor now against Google’s really bread-and-butter business,” said King Lip, chief strategist at Baker Avenue Wealth Management, which owns Alphabet and Microsoft shares.

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Lip cautioned, though, that concerns about Alphabet may be overblown, saying: “I think still Bing is a far, far cry away from Google’s search capabilities.”

The new ChatGPT software has injected excitement into technology firms after tens of thousands of job cuts in recent weeks and executive pledges to pare back on so-called moonshot projects. AI has become a fixation for tech executives who have mentioned it as much as six times more often on recent earnings calls than in prior quarters, Reuters found.

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The appeal of AI-driven search is that it could spit out results in plain language, rather than in a list of links, which could make browsing faster and more efficient. It remains unclear what impact that might have on targeted advertising, the backbone of search engines like Google.

Chatbot AI systems also carry risks for corporations because of inherent biases in their algorithms that can skew results, sexualize images or even plagiarise, as consumers testing the service have discovered. Microsoft, for instance, released a chatbot on Twitter in 2016 that quickly began generating racist content before being shut down. And an AI used by the news site CNET was found to produce factually incorrect or plagiarized stories.

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At the time of writing, the Bard ad had been viewed on Twitter more than a million times.

— Reuters

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Give us your nominations: CNBC is ranking the world’s top fintech companies

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In 2022, the fintech world took a beating, with some of the world’s most richly valued companies seeing their valuations slashed. But innovation is still happening — with a vengeance.
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CNBC and independent research firm Statista are working together to identify the world’s top fintech companies, to be named in a published CNBC report in August.
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The research will identify fintechs disrupting the giants of finance with services that are faster, cheaper and more accessible — from established firms in payments and digital banking, to rising stars in emerging fields like cryptocurrency.

In 2022, the fintech world took a beating. Some of the world’s most richly valued companies saw their valuations slashed as investors reexamined the sector against a backdrop of climbing interest rates, higher living costs, and the prospect of stricter regulation.

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But innovation is still happening — with a vengeance. The rising cost of living has opened opportunities for firms to develop tools that can help people navigate economic uncertainty — whether through better budgeting and financial planning, or education on how to manage money.

That has made the need for a transparent overview of the top fintech companies more important than ever.

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As part of the research, we are inviting entries from eligible fintech companies to register their interest in being considered for the list. To qualify, a fintech — defined as a company that provides innovative, technology-based and finance-related products and services — must have successfully completed at least one Series A funding round.

Firms will be required to submit information on their business model and certain key performance indicators.

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If you would like your company to be considered for this research, please click on this link, which will take you to the short application form hosted by Statista. Further information about the project can be found here.



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‘Inundated with requests’: Digital currency firms look to Swiss banks after crypto-friendly lenders fail

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Switzerland has created what they dub “Crypto Valley” in the region of Zug.
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Crypto firms are scrambling to find institutions to bank with after the collapse of Signature Bank and Silvergate Capital, two lenders that were friendly to digital currency companies.
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Some of these companies have turned to crypto-friendly Swiss banks, flooding them with requests for banking services, according to multiple industry insiders who spoke to CNBC.

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Typically, the crypto industry has found it difficult to access banking services from traditional lenders, who don’t want to touch anything that does not have a clear regulatory framework. This has included blockchain and crypto firms, who have instead had to turn to specialist banks.

But with two of the biggest lenders, along with SVB, now out of the picture, cryptocurrency firms have turned to Switzerland, which has sought to market itself as a crypto hub with solid regulation.

“We have been inundated with requests,” said an advisor at a private Swiss bank, who preferred to remain anonymous due to the sensitive nature of the matter.

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The advisor said on the Monday after Silvergate and Signature Bank’s winddown this month, the private lender had more requests in a single day than ever before.

“It is just nuts,” the advisor said.

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U.S., non-Europe firms look to Switzerland

Dominic Castley, chief marketing officer at Sygnum, one of Switzerland’s biggest banks that is focused on servicing digital asset companies, said it is seeing an influx of enquiries.

“Over the past weeks as the current banking industry events have unfolded, we have seen a significant increase in onboarding enquiries from various international locations,” Castley said, adding that Sygnum’s location in both Switzerland and Singapore is attractive to companies.

Sygnum has a Swiss banking license and a capital markets services license in Singapore, bringing it under the purview of regulators.

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One Switzerland-based advisor to financial technology companies, who also preferred to remain anonymous due to the sensitivity of the situation, said that has been “a lot more inflow from U.S. customers” to Swiss banks.

An executive at a European trading firm, meanwhile, said their company had been seeing “non-Europe based entities” making enquiries for new banking relationships. The executive, who wished to remain anonymous due to the sensitive nature of the topic, said these firms include crypto-focused hedge funds and venture capital firms.

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Castley said interest is “mainly coming from investors, asset managers and blockchain projects looking to diversify their crypto investments with a trusted Swiss partner like Sygnum Bank.”

Switzerland’s other major lender that deals with the digital assets industry — SEBA Bank — did not respond to a request for comment when contacted by CNBC.

Switzerland’s crypto-friendly stance

Part of why companies are seeking out Swiss banks is the country’s regulation which is welcoming to cryptocurrency firms in need of a stable operating environment.

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The country has created what locals dub “Crypto Valley” in the region of Zug, just outside the Swiss capital Zurich, where start-ups and more established digital currency firms have set up shop.

In 2021, the government introduced a regulation on companies using so-called “distributed electronic register technology” or blockchain, which originated with the cryptocurrency bitcoin but has since evolved.

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Thierry Arys Ruiz, CEO of Swiss-based blockchain firm AgAu.io, said Switzerland is “more stable” and there is “more certainty to what the rules are.”

The anonymous advisor at the private Swiss bank said that companies are coming to Switzerland to be in a “safer jurisdiction” for crypto regulation.

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Silicon Valley Bank collapse was ‘Lehman moment for technology,’ top Goldman Sachs deal-maker says

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SVB's collapse was a little like a 'Lehman moment' for tech, Goldman Sachs says
The collapse of Silicon Valley Bank was a “Lehman moment” for the technology industry, according to a top Goldman Sachs deal-maker.

Cliff Marriott, co-head of technology, media and telecoms in Europe for the investment banking division of Goldman Sachs, said that the March 10 shutdown of SVB was “pretty stressful,” as the lender’s clientele scrambled to figure out how they would make payroll.

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“That first weekend was a little bit like the Lehman moment for technology and it was really more operational for those companies,” Marriott told CNBC’s Arjun Kharpal in an interview at a Goldman Sachs tech symposium that aired Tuesday on “Squawk Box Europe.”

“They needed access to capital. A lot of their balances were on SVB. And, secondly, SVB was propelling and making a lot of their payments for payroll to pay their employees.”

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Founded in 1983, SVB was considered a reliable source of funding for tech startups and venture capital firms. A subsidiary of SVB Financial Group, the California-based commercial lender was, at one point, the 16th-biggest bank in the U.S. and the largest in Silicon Valley by deposits.

SVB was taken over by the U.S. government after its clientele of venture capitalists and tech startups withdrew billions from their accounts. Many VCs had advised portfolio companies to pull funds on the back of fears that the lender may crumble.

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SVB Financial Group’s holdings — assets such as U.S. Treasury bills and government-backed mortgage securities that were viewed as safe — were hit by the Fed’s aggressive interest rate hikes, and their value dropped dramatically.

2024 could be a 'big year' for tech IPOs, Goldman Sachs says
Earlier this month, the firm revealed it had sold $21 billion worth of its securities at a roughly $1.8 billion loss and said it needed to raise $2.25 billion to meet clients’ withdrawal needs and fund new lending.

The future of SVB remains uncertain, even though deposits were ultimately backstopped by the government and SVB’s government-appointed CEO attempted to reassure clients the bank remained open for business.

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Marriott said there is “still a big question mark regarding what bank or firm or set of firms is going to replace SVB in terms of providing those utility-like services for technology, giving them bank accounts, allowing them to make payroll, holding their cash balances.”

Read more about tech and crypto from CNBC Pro

The SVB collapse has also raised questions over the potential consequences for other banks, with SVB being far from the only lender that has come under strain. Swiss investment banking titan Credit Suisse was rescued by its main rival UBS in a government-backed, cut-price deal last week.

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Marriott also addressed tech IPOs and their outlook for 2023. Europe’s tech initial public offering market has been largely closed due to a confluence of market pressures, including higher interest rates, which make the future cashflows of high-growth tech companies less attractive.

Marriott said he would have been more optimistic about a recovery in tech IPO activity two weeks ago.

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“I’m still hopeful that we’ll see tech IPO activity in 2023. And if we don’t, I think 2024 will be a big year for tech IPOs,” Marriott said.

“I think what we’ll see is the more established profitable companies come first, so the easier-to-understand business models, profitable companies, before we see the really highly valued profit or negative profit companies that we saw in 2021.”

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