Google CEO Sundar Pichai speaks during the Google I/O keynote session at the Shoreline Amphitheater in Mountain View, California on May 7, 2019.

Josh Edelson | AFP | Getty Images

Shares of Google’s parent company Alphabet fell more than 7% on Wednesday after the company held an event to promote its new artificial intelligence chatbot called Bard, a day after rival Microsoft held its own event to showcase new AI technologies in its rival search engine Bing.

Google officially announced Bard on Monday, confirming previous CNBC reports, and the company said it will begin rolling out the technology in the coming weeks.

During Wednesday’s event, which was broadcast live from Paris, Google executives discussed some of Bard’s capabilities. The presentation showed how Bard could be used to show the pros and cons of buying an electric car, for example, or planning a trip in Northern California.

Bard is powered by the company’s large LaMDA language model, or language model for dialog applications. Google will open up the conversational technology to “trusted testers” before making it more widely available to the public, the company said in blog post Monday

The event also showcased AI improvements to a number of other Google products, including Maps and Google Lens, which allow people to search images from their phone’s camera.

Alphabet shares fell during the event, suggesting investors were hoping for more in light of growing competition from Microsoft.

Google’s event took place just a day after Microsoft hosted its own AI event at its headquarters in Redmond, Washington. Microsoft’s event was centered around new AI-powered updates to the company’s Bing search engine and Edge browser. Bing, which is a a distant second to Google when searching, will now allow users to get more conversational answers to questions.

Microsoft product updates are built on technology from ChatGPT creator OpenAI, in which Microsoft has invested billions.

ChatGPT is AI software that generates text based on complex written prompts. The web-based tool went viral after its debut in November, prompting analysts and Google employees to question whether the company was falling behind in AI, an area that has been Google’s main focus for several years. In response to ChatGPT’s popularity, Google announced an internal “code red” to accelerate the development of Bard and other AI products, and the company’s co-founders, Larry Page and Sergey Brin, it is reported got involved again, years after stepping away from the day-to-day work at the company.

Although Microsoft’s recent investments in AI are increasing pressure on Google search, some analysts say it will take time for Microsoft to see significant gains.

“Improvements in demand will act as a tailwind to [advertising revenue long term]but it will take time to bring users back to Bing, and they will need leverage to push advertisers away from Google,” Jefferies analyst Brent Thiel wrote on Tuesday. “We view these updates as the tip of the iceberg for MSFT’s Artificial intelligence capabilities, with the greatest potential in enterprise use cases.”

An analyst at UBS said Microsoft has a “mountain to climb” if it hopes to overtake Google.

CNBC’s Jennifer Elias contributed to this report.

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