Google stock bounces as “world’s best” AI model unveiled

The models are the brains behind Gemini, Google’s rival to ChatGPT and DeepSeek

Shares of Google parent company Alphabet (NASDAQ:GOOG) popped by close to 2% on Wednesday following the unveiling of Gemma 3, the tech giant’s new advanced AI models.

The FANG stock’s market price was up more than 1.8% by Wednesday afternoon, recovering from a drop-off in early morning trading and rising steadily throughout the day.

The bounce represents somewhat of a correction for Alphabet, with the stock having begun the day roughly 4% down from the same time last week.

Gemma 3 is an update on the models used to run Google’s Gemini AI chatbot, which was launched in 2024. They are intended to be used by developers in creating AI-powered applications. The technology is capable of analyzing text, video and images, with support across 35 languages.

The company is describing the new version of Gemma as “the world’s best single-accelerator model”, outperforming similar models created by DeepSeek, OpenAI, and Meta.

Google is also calling Gemma 3 “the most capable model you can run on a single GPU or TPU”.

Crucially, Google’s Gemma models are open-souce, meaning they are publicly accessible for anyone to use and modify.

Market favoring low-hardware AI tech

Google’s share price jump following the unveiling of Gemma 3 is consistent with recent market trends, which appear to favor AI technology with lower hardware requirements.

Chinese newcomer DeepSeek is perhaps the most stark example of this. The firm launched its R1 model in January and caused immediate disruption, posing a threat to U.S. AI firms whose models rely on high-end chips and considerable computing power.

Indeed, the launch of R1, which reportedly cost less to develop than ChatGPT, promptly sent the NASDAQ 100 and S&P 500 down 4% and 2.5%, respectively.

The emergence of DeepSeek has also coincided with rising tensions between the U.S. and China, with President Donald Trump continuing to threaten hefty tariffs on Chinese exports.