Baidu Surge as Hope on China’s Answer to ChatGPT

Photo of author

(Bloomberg) – Baidu Inc. soared more than 15% in March after confirming it was on track to publicly roll out its ChatGPT-like service, potentially China’s most prominent entry in the race to build AI bots Anticipated.

Read the most from Bloomberg

Its shares rose the most in nearly eight months after the company dubbed the service “Wenxin Yiyan,” or “Ernie Bot” in English. Baidu should complete internal testing in time for next month’s launch, it said in a statement.

Read more: Google releases ChatGPT rival ‘Bard’ for early testers

News of Baidu’s foray into the red-hot generative AI sector has driven Chinese AI-related stocks from Beijing Deep Glint Technology Co. to CloudWalk Technology Co. in recent days. The frenzy since the introduction of OpenAI’s ChatGPT reflects growing investor interest, attracting eye-catching investments from the likes of Microsoft Corp. Beyond Baidu, a growing number of companies big and small are trying to outdo the startup in the suddenly hot world of AI. Services.

China’s largest search engine company initially plans to integrate Ernie into its core search services. The tool will allow users to receive conversational-style search results, similar to OpenAI’s popular platform.

Baidu has spent billions of dollars researching AI in a years-long effort to transition from online marketing to deep technology. Its Ernie system — a large-scale machine-learning model trained on data from many years — will be the foundation for its upcoming ChatGPT-like tool.

Read more: Chinese search giant Baidu to launch ChatGPT-style bot

Artificial intelligence is a rare bright spot in a contracting, job-cutting tech industry. Generative AI companies – named for their ability to generate new content from digital troves of text, photos and art – are attracting vast sums of venture capital dollars. According to data from Pitchbook, in 2022, they are expected to raise approximately $920 million in the US, a 35% increase from the year before.

See also  UBS offers to buy Credit Suisse for $1bn in race to save bank

In January, Microsoft agreed to pour $10 billion into OpenAI, one of the largest startup investments ever. Furthermore, in less than three months into 2023, several generative AI companies have raised or are in talks to cumulatively raise upwards of $700 million, according to reports of funding rounds. A running list maintained by the Homebrew AI Club, a group that serves as a meeting place for AI activists, counts more than 150 startups in the field.

Read more: OpenAI is drawing competition from a fleet of startups

The ChatGPT theme has also attracted global stock markets, driving up the stocks of anything related to AI. Investors in Chinese equities have adopted this theme since the Lunar New Year holidays, even though the recent rally that -opened the broader market began to falter last week.

However, despite the good news from Baidu, the sharp run-up in some stocks is starting to show signs of strain. Deep Glint Technology fell as much as 10% on Tuesday, snapping its gain for the year to 82%, while Guangdong Tianyima Information Industry Co fell as much as 7.2%.

“The market likes to speculate on such far-fetched topics, especially when new funds are scarce,” said Wu Wei, fund manager at Beijing Win Integrity Investment Management Co. Businesses are bound to go down as fast as they came, causing losses for retail investors.”

— With assistance from Vlad Savov, Jenny Yu and April Ma.

(Adds performance of other stocks in last three paragraphs)

Read the most from Bloomberg Businessweek

See also  UBS to buy Credit Suisse in $2 billion all-stock deal

©2023 Bloomberg L.P.