Why Alphabet Stock Popped Today
Key Points
OpenAI shuts down Sora and...
Just days later, Alphabet cuts the cost of Veo.
Coincidence?
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So long, Sora -- we hardly knew ya -- and while we're on the subject -- hello Veo!
Earlier this week, artificial intelligence pioneer OpenAI announced it's shutting down its Sora video generation project to cut costs and conserve computing power for more business-focused projects, which it hopes to sell to paying corporate clients. No sooner did Sora fall down, though, than Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) came up and kicked it.
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Alphabet stock is up 4% at 1 p.m. ET.
Image source: Alphabet.
Get to know Veo
In a blog post this morning, Alphabet announced it is introducing a new and cheaper version of its own Veo video-generating tool. Dubbed Veo 3.1 Lite, "this model empowers developers to build high-volume video applications," says Alphabet. What's more, it will be available at just half the cost of the company's Veo 3.1 Fast product.
And here's the kicker: Despite the difference in names, Veo 3.1 Lite will be just as fast as Veo Fast!
Does it seem a bit suspicious to you that Google would make this announcement just days after OpenAI exited the field? It does to me. It actually seems like Google is taking advantage of its opponent's misfortune to grab market share and dominate the field of AI video production while OpenAI is preoccupied with sprucing up its financials in preparation for its IPO. Adding to my conviction on this point, Google announced it will cut the price of Veo 3.1 Fast as well, by one third, effective April 7.
(Google's top-of-the-line Veo3.1 -- neither Fast nor Lite -- will retain its usual price: $0.40 per second of video.)
What this means for Alphabet stock
OpenAI's exit doesn't leave the AI video-generation field entirely open to Google -- but it helps. With arguably its biggest competitor in retreat, this business is Alphabet's to lose.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Alphabet. The Motley Fool has a disclosure policy.
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